New Delhi: Gold prices surged 4.73 per cent during the week as a weaker US dollar, declining Treasury yields and softer-than-expected US labour market data increased expectations of a less hawkish Federal Reserve.
On Friday, October gold futures on the Multi Commodity Exchange (MCX) rose 0.11 per cent, while September silver futures gained 0.15 per cent. Gold stood at ₹1,51,985 per 10 grams, while silver was quoted at ₹2,31,804 per kg.
According to data from the India Bullion and Jewellers Association (IBJA), the price of 24-carat gold was ₹1,49,621 per 10 grams on Friday, compared with ₹1,42,863 at Monday’s market opening.
Weak US Jobs Data Supports Gold
Gold and silver benefited from falling US Treasury yields and a weaker dollar after the latest US employment data showed unexpected weakness in the labour market.
The US economy lost 23,000 jobs in July, against market expectations of an increase of around 80,000 jobs. Previous payroll figures were also revised sharply lower, with revisions for the preceding two months reducing reported employment by roughly 1.03 lakh jobs.
The weaker labour market, along with softer ADP private payroll data and other employment indicators, reduced market expectations of a September Federal Reserve rate hike to around 44 per cent, from approximately 58 per cent earlier.
Following the employment report, the benchmark 10-year US Treasury yield declined to around 4.60 per cent, from an intraday high of 4.68 per cent. Lower yields and a softer dollar generally support gold prices by improving the appeal of the non-yielding asset.
Gold Climbs to Seven-Week High
Gold had started the week under pressure as geopolitical risk premiums eased following the postponement of a planned US strike on Iran. However, the weak employment report triggered a sharp reversal, pushing gold to a seven-week high.
Crude oil prices remained volatile amid changing developments surrounding a possible agreement to reopen shipping through the Strait of Hormuz, with investors continuing to monitor geopolitical developments closely.
Despite changing expectations over US monetary policy, inflation remains a key risk. The Federal Reserve’s next policy decision is therefore expected to depend heavily on upcoming inflation and labour market data.
Gold Price Levels to Watch
Commodity experts have identified the following key technical levels:
- COMEX Gold: Immediate resistance at $4,470–$4,500
- COMEX Gold: Support at $4,330–$4,300
- MCX Gold: Immediate resistance at ₹1,52,200–₹1,52,800
- MCX Gold: Support at ₹1,50,000–₹1,50,700
Investors will continue to track Federal Reserve communication, US Treasury yields, movements in the dollar and developments around the Strait of Hormuz.
The July US inflation report, due in the coming week, is expected to be closely watched for further signals on the Federal Reserve’s monetary policy trajectory and the direction of gold prices.
