Teaser: Gold futures in New York are down 3.1% to $4,543.90 a troy ounce and headed for a weekly loss of more than 4%. Silver fell 9.7% to $77.08 per ounce in the meanwhile. After yet another wave of hawkish U.S. data this week, traders are still raising Fed rate expectations. Bond yields have consequently kept rising. The dollar index is up 0.4% to 99.23, making dollar-denominated commodities more costly for foreign purchasers, while two-year Treasury rates reached multi-month highs, putting pressure on non-yielding assets. Over millennia, the precious metal referred to as the eternal store of value has maintained its purchasing power. However, investors believe that there is a good chance that the Fed will lower interest rates again this month, which might cause precious metals to hit new highs. However, that could be derailed by developments in Middle East.
Introduction:
Gold closed near $4,540 on Friday, while silver settled around the $76 mark after a volatile week dominated by developments surrounding the US–Iran conflict and the Strait of Hormuz. Precious metals initially came under pressure after a disappointing Trump–Xi meeting failed to deliver the breakthrough markets had anticipated, particularly hopes that China could help mediate with Iran and support efforts to stabilize Hormuz shipping flows. The lack of meaningful progress, combined with renewed military tensions and elevated crude prices, reinforced inflation concerns and expectations of higher-for-longer interest rates, weighing on bullion sentiment. Going into next week, precious metals are expected to remain highly reactive to geopolitical headlines, crude price direction, and any fresh developments surrounding US–Iran negotiations and Hormuz transit stability.
WTI crude July futures closed near the $101 per barrel mark on Friday after a week of sharp swings driven by alternating geopolitical escalation and renewed optimism around a potential US–Iran agreement. Prices initially remained elevated as military exchanges around the Strait of Hormuz and continued disruptions to shipping flows reinforced concerns over global supply tightness. However, sentiment softened intermittently on reports of diplomatic proposals aimed at formally ending the conflict and gradually restoring transit through the strait. Despite periods of correction, significant draws in crude and fuel inventories continued to highlight underlying physical tightness in the market. Going into next week, crude is expected to remain highly volatile and headline-driven, with markets closely watching whether diplomatic progress can stabilize flows or whether renewed escalation pushes supply risks back to the forefront.
Gold:
Gold traded below $4,530 an ounce on Monday after tumbling nearly 4% last week, as mounting evidence that the Middle East-driven energy price shock is feeding into broader inflation pressures strengthened expectations for central bank policy tightening. The precious metal was also weighed down by strong gains in the US dollar and Treasury yields after hotter-than-expected US inflation data led investors to rule out any Federal Reserve rate cuts this year, while increasing speculation that policymakers could still raise rates before year-end. Meanwhile, President Donald Trump warned that Tehran is running out of time to secure an agreement with Washington, while Iranian media reports indicated negotiations remain deadlocked, with the US offering “no tangible concessions.” Over the weekend, energy
infrastructure in the Persian Gulf was also targeted, including a nuclear facility in the United Arab Emirates, adding to geopolitical tensions in the region.
Technical View: 4526.40. Weekly and daily charts exhibit a mildly bearish alignment among technical indicators, suggesting a breakdown below $4500 is likely to occur in the coming week. A decisive break below this level exposes an initial near term target at 4425, with major weekly supports sitting lower at 4275/4225. On the upside, immediate Resistance caps recovery attempts near 4580/4620. The price needs to cross above 4655 to alleviate the immediate downside pressure and lessen the chances of the preferred decline, turning the price structure to neutral.
Silver
Silver traded below $75 an ounce on Monday after plunging more than 13% over the previous two sessions, as growing signs that the Middle East-driven energy price shock is spilling over into broader inflation trends reinforced expectations for tighter central bank policy. The metal also faced pressure from a stronger US dollar and rising Treasury yields after hotter-than-expected US inflation data prompted investors to rule out any Federal Reserve rate cuts this year, while also increasing bets that policymakers could still deliver a rate hike before year-end. Further weighing on sentiment, UBS strategists sharply lowered their full-year silver investment demand forecast to 300 million ounces from more than 400 million ounces, citing softer industrial demand and rising mine supply.
India has curbed imports of silver in nearly all forms with immediate effect, according to a government order issued on Saturday, as the world's biggest consumer of the metal seeks to rein in shipments and ease pressure on the rupee. The restriction is expected to reduce silver imports and tighten domestic supplies, potentially lifting premiums in the local market. Lower demand from India, which meets more than 80% of its consumption through imports, could weigh on global prices.
Technical View: $74.64. Resistance at $79/80 could likely cap any upticks for a decline to $67/65. Only an unexpected rise above $83 could turn the picture bullish again.
Crude Oil
WTI crude futures rose toward $106 per barrel on Monday, building on last week’s gains as stalled US-Iran peace talks and the continued near-shutdown of the vital Strait of Hormuz kept global supply concerns elevated. President Donald Trump warned that Tehran is running out of time to reach an agreement with Washington, while Iranian media reports indicated the two sides remain deeply divided, with the US offering “no tangible concessions” during negotiations. Over the weekend, energy infrastructure across the Persian Gulf also came under attack, including a nuclear facility in the United Arab Emirates. At the same time, the Trump administration allowed a waiver permitting Russian crude sales to expire despite India’s appeal for an extension, adding further pressure to already constrained supplies. Meanwhile, last week’s two-day summit between Trump and Chinese President Xi Jinping ended without any concrete progress toward reopening the Strait of Hormuz.
Technical View: $103.21. Weekly momentum is strengthening, hinting at a continuation of the broader rise. Weekly volatility-based levels at $105.25 and 113.10, serve as the primary upside points of attraction for the coming week. The favoured view expects shallow, choppy corrections followed by upside attempts in fits and jerks. Downside Support holds near 97.95/96.95, and a break below 94.20 is required to turn the near-term outlook neutral. To fully attract sellers, the price must break below distant structural support at 89.25.
Copper
Copper futures dropped below $6.3 per pound on Friday, marking a second straight session of losses as elevated prices discouraged buying activity in China. The metal also faced pressure from accelerating US inflation, which reinforced expectations for a Federal Reserve interest rate hike later this year. Despite the recent decline, analysts continue to view Chinese copper demand as broadly resilient this year, with consumption from clean energy and technology-related industries helping offset weakness in the property and construction sectors. Copper also remains supported by a constructive long-term outlook driven by artificial intelligence-related infrastructure expansion, power grid modernization, and the broader global energy transition. On the supply side, China’s export restrictions on sulfuric acid, combined with disruptions to sulfur production in the Middle East, could tighten global supply conditions and provide additional structural support for prices.
Technical View: $6.23. Supports to be observed at $6.08/6.13 where dips can hold for a rise to $6.45/6.55 near term. Only an unexpected breakout below $5.95 could dampen our bullish expectations.