Kamal Ghorui
Precious metal prices may stabilise and witness a mild recovery next week after a steep correction, although the upside could remain capped due to elevated interest rates and a firm US dollar, analysts said.Market participants are expected to track key macroeconomic indicators, including provisional manufacturing and services PMI readings from the US, UK and Japan, as well as consumer sentiment data and jobless claims for direction.Traders will also closely watch crude oil price movements for further cues amid concerns over inflation and monetary policy, reported PTI.“In the week ahead, gold price may see some consolidation and slight recovery before prices make their next move either side,” Pranav Mer, Vice President, EBG – Commodity & Currency Research at JM Financial Services Ltd, said.Domestic precious metal prices recorded sharp losses last week. On the Multi Commodity Exchange, silver fell by Rs 32,663, or 12.59 per cent, to settle at Rs 2.26 lakh per kilogram, while gold declined by Rs 13,974, or 8.82 per cent, to close at Rs 1.44 lakh per 10 grams.Mer said the correction in gold prices continued through the week, with domestic prices slipping below Rs 1.45 lakh per 10 grams, reflecting a fall of about 9-9.5 per cent.The sell-off gathered pace mid-week after policy signals from major central banks — including the US Federal Reserve, Bank of Japan, Bank of England and the European Central Bank — highlighted concerns over rising crude oil prices and inflationary pressures, suggesting that monetary easing may not materialise soon.In global markets too, precious metals saw notable declines. Silver futures on Comex dropped by $11.68, or 14.36 per cent, to $69.66 per ounce, while gold fell by $486.8, or 9.6 per cent, to $4,574.9 per ounce over the week.NS Ramaswamy, Head of Commodity & CRM at Ventura, said gold may trade in a moderately bearish to sideways range in the coming weeks, with prices likely to stabilise after the sharp fall but remain susceptible to volatile intraday swings.He noted that the strong US dollar, hovering around the 99–100 range, and elevated interest rates continue to weigh on gold’s recovery prospects.The US Federal Reserve’s pushback against expectations of rate cuts, along with rising energy costs complicating inflation control, has led markets to push out hopes of monetary easing to 2026, reducing the appeal of gold as a safe-haven asset, Ramaswamy said.However, he added that global central banks are unlikely to change their long-term gold accumulation strategies, indicating that structural demand for the metal remains intact.Geopolitical developments have provided limited support to prices, though gold continues to act as a safe-haven asset, offering a cushion to downside risks.Seasonal demand from the upcoming wedding season and festivals such as Akshaya Tritiya may also support domestic prices in the near term.
