Gold and silver face another volatile week, with US jobs and inflation data, Federal Reserve signals, Middle East tensions and crude prices set to shape bullion sentiment. The holiday-shortened week will put the US non-farm payrolls and unemployment data in focus as markets assess expectations for the Federal Reserve’s October policy decision.Consumer confidence, GDP and PCE inflation readings, Eurozone inflation, manufacturing PMIs and speeches from Federal Reserve officials will also provide cues for bullion.The US non-farm payrolls and unemployment data will be closely watched as markets assess expectations around the Federal Reserve’s October policy decision. A stronger employment reading could reinforce rate-hike bets and put pressure on gold, while weaker employment data may cool those expectations and support bullion through a softer dollar, Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said.“The broader outlook remains cautious with volatility likely to stay elevated as the market will closely focus on the upcoming US nonfarm payrolls and unemployment data, which will be crucial in determining expectations around the Federal Reserve’s October policy decision,” Trivedi said.Markets will also track consumer confidence, GDP and PCE inflation readings from the US, along with Eurozone inflation. Manufacturing PMIs and speeches from Federal Reserve officials are among the other developments expected to provide cues for bullion sentiment.
Gold, silver ended lower last week
Precious metals enter the week after a decline in domestic and international markets.On the Multi Commodity Exchange (MCX), gold futures for October delivery fell Rs 3,500, or nearly 2.3 per cent, last week to settle at Rs 1.5 lakh per 10 grams. Silver futures declined Rs 6,907, or 3 per cent, to Rs 2.34 lakh per kilogram.“Gold remained highly volatile last week, trading within the Rs 1.5-1.54 lakh per 10 grams range and ending lower by more than 2 per cent as profit booking from higher levels continued as markets increasingly priced in the possibility of another Fed rate hike in October,” Trivedi said.The recovery remained limited as traders cut positions at elevated levels.In global markets, Comex gold futures for December delivery dropped $103.7, or 2.34 per cent, last week to $4,321.2 per ounce. Silver fell $2.35, or 3.5 per cent, to $64.80 an ounce in New York.“Gold futures traded in a range for most trading sessions last week but overall remained under selling pressure with international prices closing around $4,300 per ounce,” said Pranav Mer, Senior Vice President, EBG – commodity & currency research, JM Financial Services Ltd.Silver futures also ended with a weekly loss following gold and consolidation and correction in industrial metals, he said.
Dollar, US bond yields add pressure
The dollar and US Treasury yields will remain important factors for bullion prices.A sustained rise in the dollar index above 101 could add to the pressure on gold, as a stronger dollar tends to reduce demand for dollar-denominated bullion.US 10-year Treasury yields have climbed to their highest since 2007, while 30-year yields are near 2004 highs. Higher long-term yields tend to dent demand for assets such as gold and silver even as Middle East and Russia-Ukraine tensions persist.
Middle East and crude in focus
Geopolitical uncertainty will continue to play a role, particularly the US-Iran standoff. US President Donald Trump said that he rejected Tehran’s proposal to reopen the Strait of Hormuz within a week and resume nuclear talks in exchange for lifting the naval blockade.Oil markets will offer another variable for bullion and broader commodity sentiment. Russia and Ukraine continue to target energy infrastructure, but higher supplies from Saudi Arabia and Iraq have improved availability this month and weighed on crude prices, Mer said.Commodity markets would remain closed on Friday for Mahatma Gandhi Jayanti.