Gold, silver brace for turbulent week as US-Iran talks break down: Analysts

Precious metals may witness heightened volatility when markets open on Monday as the collapse of US-Iran negotiations keeps sentiment fragile and investors track domestic inflation and Chinese economic data, analysts said.

Besides developments related to West Asia, traders will also monitor the US Producer Price Index (PPI), crude oil prices and speeches from several Federal Reserve officials for further direction on bullion prices, they said.

Domestic commodities market will remain closed on Tuesday for the morning trade on account of Dr Baba Saheb Ambedkar Jayanti but will resume trading in the evening session.

Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, said the US delegation ”failed to gain the trust of the Iranian delegation in this round of negotiations”.

Ghalibaf, who led the Iranian delegation, said his country’s delegation negotiated in good faith and raised ”forward-looking initiatives”.

Meanwhile, US Vice-President JD Vance said the negotiations finished without a deal after Iranians refused to accept American terms to refrain from developing a nuclear weapon.

”Focus will be on the key Chinese data on trade, investments and growth, etc. along with inflation numbers from Euro zone economies. In the domestic market, traders will monitor the Consumer Price Index (CPI) and Wholesale Price Index (WPI) inflation earlier in the week,” Pranav Mer, Vice President, EBG, Commodity & Currency Research, JM Financial Services Ltd, said.

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He added that volatility in the bullion remained high as markets across the world focused on peace talks between the US and Iran and any progress would be positive for risk assets such as equities and commodities, etc., and may push up precious metals as well. However, any change on the contrary will again trigger increased volatility in the financial market.

On the Multi Commodity Exchange, precious metals settled the week on a green territory. Silver futures jumped ₹10,779, or nearly 5%, while gold appreciated ₹2,972, or 2%.

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”Gold prices closed in positive for the third straight week, supported by a weaker dollar, safe-haven buying amid ongoing geopolitical uncertainty in West Asia, and reports of a rebound in physical demand in countries such as India and China,” he said.

Mer noted that weaker-than-expected US economic data and signs of elevated inflation due to high oil prices raised expectations that the Federal Reserve may keep interest rates steady at current levels.

In the international markets, Comex gold futures rose USD 107.7, or 2.3 per cent, during the last week, while silver gained USD 3.56, or nearly 5 per cent.

Silver prices also ended the week with gains of more than 4.5%, supported by positive momentum in gold, renewed buying in industrial metals, a structural deficit in the physical market and a weaker US dollar.

According to analysts, market participants will also closely track developments around expected negotiations between Israel and Lebanon next week in Washington for further cues on the trajectory of bullion prices.