Gold and silver prices are expected to witness heightened volatility this week as geopolitical tensions escalate following the collapse of US-Iran talks and a sharp warning from Donald Trump over the Strait of Hormuz.

Analysts said bullion markets could see sharp movements when trading resumes on Monday, with investors closely tracking global developments, including the US warning of a potential blockade in the key oil transit route.

Besides West Asia tensions, traders will also keep an eye on key economic indicators such as the US Producer Price Index (PPI), crude oil prices, and speeches by Federal Reserve officials for further direction.

Domestic commodity markets will remain closed for the morning session on Tuesday on account of Ambedkar Jayanti, before reopening in the evening.

Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, said the US delegation “failed to gain the trust of the Iranian delegation in this round of negotiations”.

Ghalibaf, who led the Iranian side, added that his country negotiated in good faith and put forward “forward-looking initiatives”.

Meanwhile, US Vice-President JD Vance said the talks ended without an agreement after Iran refused to accept American terms to halt its pursuit of nuclear weapons.

“Focus will be on the key Chinese data on trade, investments and growth, etc., along with inflation numbers from Eurozone economies. In the domestic market, traders will monitor the Consumer Price Index (CPI) and Wholesale Price Index (WPI) inflation earlier in the week,” Pranav Mer, Vice President, EBG, Commodity & Currency Research, JM Financial Services Ltd, said.

He added that volatility in bullion remains elevated as markets react to geopolitical developments. “Any progress in peace talks would be positive for risk assets such as equities and commodities and may push up precious metals as well. However, any change on the contrary will again trigger increased volatility in the financial market,” he said.

On the Multi Commodity Exchange, precious metals ended last week on a strong note, with silver futures jumping ₹10,779, or nearly 5 per cent, and gold gaining ₹2,972, or about 2 per cent.

“Gold prices closed in positive for the third straight week, supported by a weaker dollar, safe-haven buying amid ongoing geopolitical uncertainty in West Asia, and reports of a rebound in physical demand in countries such as India and China,” Mer said.

He also noted that weaker-than-expected US economic data and elevated inflation expectations due to high oil prices have increased the likelihood of the Federal Reserve holding interest rates steady.

In international markets, Comex gold futures rose USD 107.7, or 2.3 per cent, last week, while silver gained USD 3.56, or nearly 5 per cent.

Silver prices were further supported by strong industrial demand, a structural supply deficit, and a weaker US dollar, analysts said.

Market participants will also track upcoming geopolitical developments, including expected negotiations between Israel and Lebanon, for further cues on bullion price trends.