For next week, we’re looking at a flat to range-bound session for gold while traders have to balance out policy signals with the latest from Washington and Tehran and the usual oil jitters. That’s the mood after a rather bumpy few days where MCX August futures gave up 3.2 per cent, or Rs 5,066, to end in the neighbourhood of Rs 1.50 lakh for 10 grams after they were put to the test at lower levels.
Domestic market snapshot
The pullback on the Multi Commodity Exchange was no slouch. We saw prices dip into the Rs 1,48,000 per 10 gram area for a bit. Silver wasn’t far behind, with July futures eking out a loss of Rs 2,351 – just under 1 per cent – to come in at Rs 2.46 lakh a kilo as sentiment was a little on edge.
“Gold was under pressure from the energy side of things and the open question of the US-Iran discussions, so you had a 3 per cent plus drop,” says Jateen Trivedi, VP Research Analyst for Commodity and Currency at LKP Securities. “But then some safe-haven demand came in and you could see it make up for some of that.”
Why central banks and oil now set the tone
It is the policy path that will have the most say in how people position themselves in the short term. You have the Bank of Japan, the Fed and the Bank of England to watch, not to mention the inflation numbers coming out of the UK, the Eurozone, Germany and Japan. All of that goes into shaping what the world expects for interest rates.
And that has an effect on bullion. Analysts will tell you that with ETF investors still offloading and the idea of higher rates hanging over us until at least 2027, it has been hard on prices. Then again, if there is any kind of surprise in the rate department, you can count on a change of tack.
US-Iran deal as the wild card
The one thing everyone is waiting on is the US-Iran accord. “If you get a signature on the table, it could see risk assets run and that would be good for gold and silver too,” says Pranav Mer, VP at EBG – Commodity & Currency Research, JM Financial Services Ltd. “An escalation, on the other hand, is not something you want to see.”
Mer points out that some of the week’s losses were put back in place late on as the dollar and bond yields let up on the news of a possible peace deal. With word that there was no military action in the offing, the panic subsided and you got a bit of a lift in safe-haven appeal.
Global pricing cues
Over on the Comex, gold futures were down USD 126.5 for the week, or close to 3 per cent, to finish at USD 4,238.8 an ounce. Silver made a similar move, losing 1.6 per cent to USD 67.97, which is a sign of the general wariness in the metals space.
The more than 5 per cent bounce we saw in gold towards the end of the week, as Mer puts it, is a case in point of how fast the book can be rewritten on a headline. Add in a sterner oil environment and you have traders on edge for whatever macro data comes out next week.
G7 signals and what to watch next
Geopolitics is not going anywhere. At the G7 in France, with PM Modi and others in the room to talk about Iran and Ukraine, we may get some new bearings for the haven and energy markets.
Some of the key items for the road ahead:
– What the Fed, BoJ and BoE decide to do
– Inflation figures from the UK, the Eurozone, Germany and Japan
– Any word on a US-Iran settlement
– Where the crude benchmarks are heading
From a strategy point of view, the case for gold isn’t so much about new buyers as it is about managing your risk. With ETFs in the red and the likelihood of a tight policy stance through mid-2027, a real breakout is an uphill battle. But a dovish shift or a quiet outcome with Iran could well put some air back in the price.
In India, the Rs 1.50 lakh mark for 10 grams has become a sort of line in the sand after last week. As long as the global picture is even, we should see some churning and not a clear trend, with silver following the same script but with a bit more of a reaction to the risk-on, risk-off dynamic.
The approach is straightforward: work the range and let the data drive you. A smooth landing with the US and Iran and steady oil could take the edge off and we might see a slow recovery. Put a hawkish twist or some geopolitical noise in the mix, though, and you’ll see rallies put on hold.
