Gold & Silver Prices: West Asia, Fed Minutes Fuel Volatility

Gold and silver prices are set for a positive trajectory in the coming week, though significant volatility is anticipated. This outlook is primarily driven by ongoing developments in West Asia and a series of crucial global economic data releases.

Domestic Bullion Performance Last Week

• MCX gold futures for October delivery gained Rs 2,686, or nearly 2 percent, last week.
• The contract closed at Rs 1.54 lakh per 10 grams on the Multi Commodity Exchange (MCX).
• MCX silver for the September contract increased by Rs 4,458, representing a 1.9 percent rise.
• Silver reached Rs 2.35 lakh per kilogram by week’s end.

MCX gold has surged by nearly 9.5 percent throughout August, indicating that consolidation and intermittent profit-booking are likely in the near term. Jateen Trivedi, VP Research Analyst — Commodity and Currency at LKP Securities, noted gold gained 1 percent this week, peaking over 2 percent before profit-booking.

International Market Snapshot

• Comex gold futures for December delivery climbed $37.6, almost 1 percent last week.
• International gold closed at $4,437.3 per ounce in New York.
• Comex silver rose $1.61, an increase of 2.5 percent.
• Silver reached $65.11 an ounce in international markets.

Pranav Mer, Senior Vice President, EBG – Commodity & Currency Research at JM Financial Services Ltd, forecasts gold and silver to advance towards Rs 1.57 lakh per 10 grams and Rs 2.54 lakh per kg, respectively. Bullion prices received support as traders reduced expectations for a September rate hike by the US Federal Reserve, following weaker-than-expected non-farm payroll data and stable inflation amidst mixed economic indicators.

Key Drivers and Upcoming Data

• Safe-haven demand continues to bolster gold prices due to the West Asia conflict and US-Iran tensions over the Strait of Hormuz.
• Silver maintained a positive bias, despite a temporary pause in the recent industrial metals rally.
• Market participants will monitor US housing and trade data, alongside inflation reports from the UK, Eurozone, and Japan.
• China’s economic indicators will provide cues for industrial metals, and the Federal Reserve’s FOMC meeting minutes will be scrutinized for future monetary policy signals.

The US dollar, interest-rate expectations, and geopolitical developments will remain the primary factors influencing bullion prices. Analysts anticipate continued positive movement, albeit with high volatility, as these global and domestic elements interact.