Central Banks Meetings, US-Iran Deal, Crude Oil Movement to Steer Bullion Prices: Analysts

Gold prices are likely to remain range-bound next week as investors await key monetary policy decisions from major central banks, developments in the US-Iran negotiations and movement in crude oil prices, analysts said.

Meetings of the Bank of Japan, the US Federal Reserve and the Bank of England, along with inflation data from the UK, the Eurozone, Germany and Japan, will be closely tracked for cues on the global interest rate trajectory.

Analysts said the finalisation of the US and Iran agreement would remain a key trigger for bullion prices.

"A close eye will remain on the finalisation of the US-Iran deal. If signed, then we may see an extended rally in risk assets that may lift gold and silver as well. However, any escalation would be negative for markets," Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said.

On the domestic front, gold futures for August delivery on the Multi Commodity Exchange (MCX) declined Rs 5,066, or 3.2 per cent, during the week to settle at around Rs 1.50 lakh per 10 grams. Silver for the July contract fell Rs 2,351, or nearly 1 per cent, to Rs 2.46 lakh per kilogram.

"Gold prices declined sharply, falling more than 3 per cent and testing the Rs 1,48,000 per 10 gram level on the MCX," Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities, said.

The yellow metal remained volatile through the week as easing concerns in the energy market and uncertainty surrounding the US-Iran negotiations weighed on prices, he added.

However, investors' sentiment improved later after reports suggested there would be no immediate military action against Iran, reviving safe-haven buying and helping bullion recover part of its losses, Trivedi said.

In the international markets, Comex gold futures fell USD 126.5, or nearly 3 per cent, during the week to close at USD 4,238.8 per ounce, while silver declined USD 1.13, or 1.6 per cent, to USD 67.97 per ounce.

Mer said gold pared some of its weekly losses in the final trading sessions, with prices rebounding more than 5 per cent after the US dollar weakened and bond yields declined amid reports that a US-Iran peace deal could be signed soon.

However, he noted that traders remained cautious as the situation would remain uncertain until both sides formally sign the agreement.

Continued liquidation by exchange traded fund investors and growing expectations of a higher interest rate environment at least until the first half of 2027 also weighed on bullion prices, Mer added.

According to analysts, market participants will also watch the G7 Summit in France, where leaders, including Prime Minister Narendra Modi, are expected to deliberate on the conflicts in Iran and Ukraine, for fresh cues on the near-term direction of precious metals.