Gold and silver prices are expected to remain sensitive to developments in the Middle East, crude oil price movements and a series of key economic data this week, analysts said.Market participants will closely track trade and inflation data from China and the US, consumer confidence numbers from Washington and Indian CPI readings for signals about the direction of precious metals.The ECB’s monetary policy decision will also be in focus as investors assess its implications for bullion and other commodities.“The momentum of precious metals like gold and silver still looks corrective,” said Pranav Mir, Vice President, EBG – Commodity and Currency Research, JM Financial Services Ltd.Domestic bullion markets ended last week on a weak note. MCX gold futures for August delivery fell by Rs 5,317, or 3.3%, to Rs 1.55 lakh per 10 gram, while silver futures for July delivery fell by Rs 18,461, or 7%, to Rs 2.48 lakh per kg.“Gold witnessed a weak performance last week as rising crude oil prices shifted market attention away from safe-haven assets,” said Jatin Trivedi, vice president research analyst for commodities and currencies at LKP Securities.
He added that the rise of the rupee against the US dollar added more pressure on precious metals.“As a result, domestic bullion underperformed its international counterparts, as currency gains offset part of the support from global gold prices,” Trivedi said.In international markets, gold futures on Comex fell $227.7, or 5%, to close the week at $4,365 per ounce, while silver fell $6.77, or nearly 9%, to $69.10 per ounce.Gold prices remained under pressure in overseas markets and ended the week down about 5%, while silver also saw a sharp correction in line with weakness in industrial metals, Mir said.He added, “The stronger-than-expected US Purchasing Managers’ Index and labor market data strengthened expectations of higher interest rates in the long term, while the rise in the US dollar and exchange-traded fund flows affected bullion.”Analysts also pointed to indications from Russian and Ukrainian leaders that the conflict may be heading toward resolution, reducing safe-haven demand for precious metals.Looking ahead, Trivedi said gold and silver may remain under pressure if global gold prices remain below the USD 4,400-4,500 per ounce range.“Going forward, precious metals may remain at risk if global prices remain below the USD 4,400-4,500 per ounce range, while a rising rupee, rising crude oil prices and cautious investor sentiment could cap any sharp recovery,” he said.