Gold and silver prices are set to continue their upward rally next week, but the momentum will depend on geopolitical and economic cues, according to Business-Today. Analysts expect bullion to remain firm as markets weigh the latest developments in the Middle East alongside inflation, trade and other global cues. The report pointed to the Federal Reserve’s FOMC minutes, US housing and trade data, inflation figures from the UK, Eurozone and Japan, and China’s economic indicators as the key inputs for bullion and industrial metals prices.
Last week’s price action
| Contract | Exchange | Weekly change | Closing price |
|---|---|---|---|
| Gold futures, October delivery | MCX | +Rs 2,686 (~2%) | Rs 1.54 lakh per 10 grams |
| Silver futures, September delivery | MCX | +Rs 4,458 (1.9%) | Rs 2.35 lakh per kg |
| Gold futures, December delivery | Comex | +$37.6 (~1%) | $4,437.3 per ounce |
| Silver | New York | +$1.61 (2.5%) | $65.11 per ounce |
According to Business-Today, gold futures have now closed higher for a second consecutive week, though the metal remained in consolidation after an 11% rally from below $4,000 per ounce, said Pranav Mer, senior vice president, EBG - commodity & currency research, JM Financial Services Ltd. Domestically, MCX gold has gained nearly 9.5% this month, making consolidation and intermittent profit-booking at higher levels more likely in the near term, according to Jateen Trivedi, VP research analyst, commodity and currency, LKP Securities.
What drove the rally
Bullion prices found support after traders pared back bets on a September rate hike by the US Federal Reserve following weaker-than-expected non-farm payroll data and steady inflation, Mer said. Other economic indicators remained mixed. Gold also continued to draw safe-haven demand amid the Middle East conflict and US-Iran tensions over the Strait of Hormuz, with no resolution to the conflict in sight, Mer added. Silver, too, held on to its positive bias, although prices consolidated as the recent rally in industrial metals paused, the report said.
Analyst outlook for next week
The outlook for gold and silver remains positive and are expected to move up towards Rs 1.57 lakh per 10 grams and Rs 2.54 lakh per kg level.
— Pranav Mer, senior vice president, EBG - commodity & currency research, JM Financial Services Ltd, told PTI
Jateen Trivedi of LKP Securities noted that gold traded higher this week, gaining 1%, while the rally extended more than 2% at the peak before profit-booking emerged at higher levels. The sharp August run-up could, however, bring some pauses, with consolidation and profit-booking at higher levels more likely in the near term, he said.
Data and drivers to watch
Markets will keep an eye on US housing and trade data, inflation figures from the UK, Eurozone and Japan, and China’s economic indicators for cues on industrial metals, according to Business-Today. The minutes of the Federal Reserve’s FOMC meeting will also be closely watched for signals on the US central bank’s monetary policy outlook.
For bullion investors, the focus remains firmly on three familiar forces. According to Trivedi, the US dollar, interest-rate expectations and geopolitical developments will remain the key drivers for bullion prices. For commodity traders and procurement teams, the continued consolidation at higher levels suggests the underlying trend remains bullish, while near-term entry points may be tested by profit-booking. The dual push from safe-haven demand and shifting Fed rate expectations means gold and silver will remain sensitive to the FOMC minutes and Middle East headlines in the week ahead, according to the analysts cited in the report.
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