Precious metals under pressure amid US-Iran peace talks, central bank decisions

Precious metals gold and silver could remain under pressure in a holiday-shortened trading week as markets react to developments around US-Iran peace talks, movements in crude oil prices and key global central bank policy decisions, analysts said. According to analysts, sentiment in precious metals is expected to be shaped largely by geopolitical and macroeconomic triggers in the coming days. "Focus in the coming week will remain on the progress in peace talks between the US and Iran, and their potential impact on oil, gold, and broader financial markets," Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, told PTI. Investors will also track monetary policy decisions from major central banks, including the US Federal Reserve, Bank of Japan, Bank of England and European Central Bank. The April 29 Federal Open Market Committee (FOMC) meeting, which will be the last chaired by Jerome Powell, is expected to be closely watched for policy signals. Key US macroeconomic data releases, including housing numbers, PCE inflation, consumer confidence, and factory activity readings from major economies later in the week, are also likely to influence sentiment. On the Multi Commodity Exchange, gold futures declined Rs 1,910, or 1.23%, to close the week at Rs 1.54 lakh per 10 grams, while silver fell Rs 12,506, or 4.9%, to settle at Rs 2.44 lakh per kilogram. Analysts said gold's downside in the domestic market was partly cushioned by a weaker rupee, which fell around 1.4% during the week. In global markets, Comex gold dropped $138.7, or 2.8%, to finish at $4,740.9 per ounce, while silver declined $5.4, or 6.6%, to $76.41 per ounce. "Gold prices pared some of the recent gains last week after failing to breach past $5,000 per ounce in the international market and were weighed by multiple factors, including profit-booking after a gain of 10-12% in the previous four weeks," Mer said. Crude oil prices rose above $100 per barrel after the US-Iran blockade of the Strait of Hormuz raised supply concerns. Mer added that firm US dollar demand and higher Treasury yields continued to weigh on precious metals, supported by stronger-than-expected US retail sales, jobless claims and consumer sentiment data. He further noted that mixed central bank activity and uncertainty over the timing of future rate changes amid commodity-driven inflation could keep bullion volatile. Going ahead, analysts expect gold to find support at lower levels but remain vulnerable if the dollar stays strong and geopolitical tensions ease. Silver may see higher volatility due to its dual nature as both an industrial and precious metal. Domestic commodity markets will remain closed on Friday on account of Maharashtra Day. Any escalation in the Middle East, particularly around the Strait of Hormuz, or dovish signals from major central banks could revive demand for bullion, they added.