Precious metals are expected to stay supported next week despite sharp swings driven by Middle East tensions, US economic data, and the Federal Reserve’s policy minutes, with analysts highlighting vulnerabilities to profit-taking and rapid reversals.
Gold and silver are likely to stay supported next week, but traders should expect sharp swings as tensions in West Asia, key US economic releases and the Federal Reserve’s latest policy minutes all feed into sentiment, analysts said. The precious metals market has been particularly sensitive to shifts in the dollar, interest-rate expectations and geopolitical risk, with safe-haven buying continuing to play a major role when conflict in the Middle East intensifies.
On the domestic market, gold futures for October delivery rose ₹2,686, or nearly 2 per cent, last week to close at ₹1.54 lakh per 10 grams on the Multi Commodity Exchange. Silver for September gained ₹4,458, or 1.9 per cent, to ₹2.35 lakh a kilogram. Pranav Mer of JM Financial Services said the trend still points higher, with gold seen moving towards ₹1.57 lakh per 10 grams and silver towards ₹2.54 lakh a kilogram. Jateen Trivedi of LKP Securities said the recent rally has left the market vulnerable to consolidation and profit-taking, particularly after August gains of almost 9.5 per cent in MCX gold.
The international backdrop has been equally supportive, even as traders digest competing signals. Comex gold for December delivery rose $37.6, or nearly 1 per cent, over the week to $4,437.3 an ounce, while silver gained $1.61, or 2.5 per cent, to $65.11. That extends a broader uptrend that analysts say has been reinforced by softer-than-expected US labour data, steady inflation and reduced expectations of an immediate rate increase by the Fed. At the same time, earlier reports from market outlets showed that gold has repeatedly surged towards recent highs when investors have turned cautious ahead of central bank guidance and renewed Middle East tension.
For the week ahead, traders will watch US housing and trade data, inflation readings from Britain, the euro area and Japan, and China’s economic indicators for clues on industrial demand. The Fed minutes will be scrutinised for any change in tone on policy, particularly after recent volatility in bullion linked to the dollar and Treasury yields. Analysts say the market remains caught between rate-cut hopes and geopolitical caution, leaving both gold and silver prone to quick reversals even as the medium-term bias remains positive.
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