After witnessing sharp fluctuations last week, gold prices are expected to remain volatile in the coming days as investors track rising tensions in the Middle East and releases of key global economic data, analysts said on Sunday.Market participants are likely to track developments in the conflict between Israel and Iran, as any escalation could support safe-haven demand for bullion, while signs of easing tensions could lead to sharp profit-taking in the market.“The focus will once again be on developments in the Middle East. Any further escalation could be positive for gold prices, but signs of de-escalation could lead to sharp selling,” Pranav Mir, vice president of commodities and currency research at JM Financial Services, told news agency PTI.
Analysts noted that silver is also witnessing increased volatility, although it is currently going through a consolidation phase.“Silver is trading with high volatility but remains limited due to consolidation moves in gold and industrial metals such as copper and zinc,” Mir added.In the local market, bullion futures witnessed sharp fluctuations over the past week. On the Multi Commodity Exchange (MCX), silver fell by Rs 14,359, or 5.08 per cent, while gold fell by Rs 470, or 0.3 per cent.
According to Prathamesh Mallya, Vice President, Research (Commodities & Non-Agricultural Currencies) at Angel One, gold traded within a wide range of Rs 1.59 lakh to Rs 1.70 lakh per 10 gram last week.He added that geopolitical tensions, strong demand from Asian markets, continued central bank purchases, rising US Treasury yields and a stronger US dollar are among the key factors currently shaping bullion prices.Globally, COMEX silver futures fell $8.98, or nearly 10 percent, during the week, while gold prices fell $89.2, or 1.7 percent.Analysts noted that gold ended the week in negative territory as investors turned towards alternative safe-haven assets such as the US dollar, Swiss franc and government bonds, even as ongoing geopolitical tensions helped limit deeper losses.Investors will also be watching key economic indicators next week, including inflation and trade data from China, inflation readings from the US, Germany and India, as well as US consumer sentiment and the personal consumption expenditures (PCE) price index, which could influence global growth outlook and monetary policy outlook.
