Gold Prices to Remain Volatile Amid West Asia Tensions, Crude Oil and Global Economic Data

Global Gold Prices to Remain Sensitive to West Asian Developments

Gold prices are expected to remain sensitive to developments in West Asia, movement in crude oil prices, and a series of key economic data releases in the coming week, according to analysts.

Investors will closely monitor trade and inflation data from China and the US, mid-month Washington's consumer sentiment figures, and India's Consumer Price Index (CPI) readings. The European Central Bank's monetary policy decision will also be in focus as market participants assess its impact on bullion and other commodities.

Domestic commodity markets ended the week lower, with MCX gold futures for August delivery falling by Rs 5,317, or 3.3 per cent, to Rs 1.55 lakh per 10 grams. Silver for July delivery fell by Rs 18,461, or 7 per cent, to Rs 2.48 lakh per kilogram on the Multi Commodity Exchange (MCX).

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The rupee's strengthening against the US dollar added further pressure on precious metals, causing domestic bullion to underperform its international counterpart. Currency gains offset part of the support from global gold prices.

In the global markets, Comex gold futures shed USD 227.7, or 5 per cent, to end the week at USD 4,365 per ounce, while silver fell by USD 6.77, or nearly 9 per cent, to USD 69.10 per ounce.

According to analysts, indications from Russian-Ukrainian leaders that the conflict could end soon have reduced the demand for bullion. Going ahead, precious metals may remain vulnerable if international prices stay below the USD 4,400-4,500 per ounce range. A firm rupee, elevated crude oil prices, and cautious investor sentiment could cap any sharp recovery.

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