Bullion watch: Gold, silver seen range-bound as US-Iran talks enter crucial phase

Gold and silver are expected to take cues from developments in the ongoing US-Iran talks this week, with analysts forecasting a largely steady trend for gold prices while silver may continue to outperform amid geopolitical tensions and elevated crude oil prices.

Investors are also likely to track a series of economic indicators from the United States, including GDP data, housing numbers, consumer confidence figures and the Personal Consumption Expenditure (PCE) inflation print, as markets look for signals on the Federal Reserve’s next policy move.

“Gold price momentum next week looks sideways, while silver still looks positive as focus will again be on the peace negotiations between the US and Iran to end the war,” said Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd.

Trading activity in domestic commodity futures markets will be curtailed on Thursday morning due to Bakri Id.

On the MCX, gold futures ended the previous week at Rs 1.58 lakh per 10 grams after posting marginal gains, while silver futures settled lower at Rs 2.71 lakh per kilogram.

“Gold traded in a range-bound manner last week, posting marginal gains of around 0.40% on the MCX to close near Rs 1,58,670 per 10 grams,” said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.

He noted that crude oil prices witnessed heavy profit booking during the week and corrected nearly 7% from recent highs, easing concerns around inflationary pressure globally.

“At the same time, the rupee recovered from weaker levels of 97 against the US dollar to strengthen near 95.70, which limited upside momentum in domestic gold prices despite stable international bullion trends,” Trivedi added.

In international trade, Comex gold futures closed the week 1% lower at $4,523.2 per ounce. Silver futures also weakened, slipping nearly 2% to $76.20 per ounce.

“Gold prices moved in a consolidative range over the past few sessions, but ended the week with a marginal loss. Prices were steady amid a lack of fresh direction in the market -- be it on the economy front or the US-Iran war front,” Mer said.

According to analysts, uncertainty surrounding the geopolitical situation has continued to keep markets on edge, particularly as statements from both Washington and Tehran have frequently shifted.

On Sunday, US President Donald Trump said that an agreement between the US and Iran aimed at reducing tensions in the Gulf region and reopening the Strait of Hormuz was close to being finalised.

Posting on Truth Social, Trump said the deal had been “largely negotiated” and that only final formalities remained.

However, Iranian media disputed Trump’s remarks regarding the full reopening of the Strait of Hormuz, stating that Tehran would continue to maintain control over the key waterway.

Analysts said the contrasting positions from both sides are likely to keep bullion prices sensitive to any fresh headlines emerging from the region.

Meanwhile, market participants are also expected to monitor comments from Federal Reserve officials after Kevin Warsh formally succeeded Jerome Powell as head of the US central bank on Friday during a period of geopolitical tensions, market volatility and persistent inflation pressures.

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