Precious Metals Price Analysis and Demand Headwinds

Analysts view the recent sharp price declines in both gold and silver as excessive, with silver hitting a 12-month low and underperforming gold. This price environment is also impacting physical demand, as projections for India see gold purchases falling to a six-year low by 2026 due to high prices and rising consumer living costs.

Geopolitical Factors Influencing Markets

Geopolitical developments continue to influence broader market sentiment, with ongoing hostilities in Ukraine and a volatile oil market. Hopes for US-Iran talks have caused a pullback in oil prices, though analysts note that the supply-demand situation remains precarious and a sizeable risk premium is still embedded in the market.

Market Caution Ahead of US Midterm Elections

Financial markets are exhibiting caution as traders focus on the US midterm elections and associated institutional risks. The rising cost of living has been identified as a central issue shaping election risks, eroding household purchasing power despite some solid growth metrics. This uncertainty is contributing to flat trading in major currency pairs against the US Dollar, which has been influenced by both political developments and recent economic data.