- China's central bank continued accumulating gold, reinforcing official-sector demand as a key pillar of support for the yellow metal.
- Gold futures for August delivery rose Rs 2,200 (1.6%) domestically and USD 52 (1.3%) globally last week.
- Bullion saw sharp swings after Brent crude briefly reclaimed the USD 100-per-barrel mark following Houthi strikes on Saudi-owned vessels, but later recovered as oil retreated.
- Markets are now focused on the Federal Reserve's interest rate decision, oil price movement, and West Asia geopolitical risks as key factors affecting gold prices.
- Investors will also monitor US Consumer Confidence, Core PCE inflation, weekly jobless claims, and policy announcements from the Bank of England and Bank of Japan.
Gold and silver prices are at a critical juncture as they prepare for a week influenced by the Federal Reserve's interest rate decision, volatile oil prices, and geopolitical tensions in West Asia.6
Analysts indicate that these factors will significantly impact bullion's market performance.
"Market sentiment will continue to be driven by developments in the US-Iran geopolitical situation, the direction of crude oil prices, and their impact on inflation expectations ahead of the US Federal Reserve's policy decision on July 29," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.
Last week, gold futures for August delivery rose Rs 2,200, or 1.6 per cent, closing at Rs 1.43 lakh per 10 grams, while silver futures for September delivery gained Rs 5,735, or 2.7 per cent, to Rs 2.22 lakh per kilogram. 23
Globally, Comex gold futures advanced USD 52, or 1.3 per cent, to settle at USD 4,070.8 per ounce, and silver rose USD 3, nearly 5 per cent, to USD 58.90 per ounce in New York.
Analysts noted that bullion experienced sharp swings after Brent crude briefly reclaimed the USD 100-per-barrel mark due to Houthi strikes on Saudi-owned vessels, raising fears of supply disruptions.45
However, oil prices later retreated, allowing precious metals to recover towards the week's end.
Praveen Singh, Head of Commodities at Mirae Asset ShareKhan, stated that gold and silver are likely to trade within a range as markets monitor developments surrounding Iran.
Additionally, traders will keep an eye on shipping activity through the Strait of Hormuz and comments from Federal Reserve Chair Kevin Warsh for future interest rate signals.
Apart from the Fed's decision, investors will also watch US Consumer Confidence, Core Personal Consumption Expenditures (PCE) inflation data, and monetary policy announcements from the Bank of England and the Bank of Japan.7
“Gold futures climbed Rs 2,200 (1.6%) domestically and $52 (1.3%) globally last week, while silver surged nearly 5% globally. China's central bank continued accumulating gold in May, and traders are closely watching shipping through the Strait of Hormuz and Fed Chair Kevin Warsh's comments for rate signals.”
