Precious metal prices are likely to consolidate with a mild recovery bias next week after a sharp correction, though the upside may remain capped amid elevated interest rates and a firm US dollar, analysts said.
Investors will track key macroeconomic data, including provisional manufacturing and services PMI readings from the US, UK and Japan, along with consumer sentiment and jobless claims for direction.
Traders will also closely monitor oil price movement for further cues, they added.
“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, JM Financial Services Ltd, said.
In the domestic market, precious metal prices witnessed steep losses last week.
On the Multi Commodity Exchange, silver tumbled by Rs 32,663, or 12.59 per cent, to settle at Rs 2.26 lakh per kilogram, while gold dropped 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 last week, with domestic prices falling below Rs 1.45 lakh per 10 grams, reflecting a sharp decline of around 9-9.5 per cent.
The selloff accelerated mid-week following policy signals from major central banks, including the US Federal Reserve, Bank of Japan, Bank of England, and the European Central Bank, which flagged concerns over rising crude oil prices and inflationary pressures, indicating that monetary easing is unlikely to come any time soon.
In the international markets, precious metals also saw significant declines. Silver futures on Comex slumped by USD 11.68, or 14.36 per cent, to USD 69.66 per ounce, while gold plunged by USD 486.8, or 9.6 per cent, to USD 4,574.9 per ounce over the past 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 recent sharp decline but remain prone to volatile intraday swings.
He noted that a strong US dollar hovering near the 99-100 range and elevated interest rates continue to exert pressure on gold’s recovery.
The US Federal Reserve’s pushback against rate cut expectations, along with rising energy costs complicating inflation control, has led financial markets to defer expectations of monetary policy easing into 2026, reducing the appeal of the safe-haven asset, Ramaswamy said.
However, he added that global central banks are unlikely to alter their long-term gold accumulation strategies, suggesting that structural demand for the metal remains intact.
Geopolitical factors have provided limited support to prices, though gold continues to act as a safe-haven asset offering a floor to downside risks.
In the domestic market, seasonal demand from the upcoming wedding season and festivals such as Akshaya Tritiya may lend some support to prices in the near-term.
