Mumbai, August 1: Gold prices have seen a decline of 1.15% this week, pressured by a strong U.S. dollar and rising U.S. Treasury bond yields. This has impacted the demand for gold as a safe-haven investment.
On Friday, gold futures for August delivery showed a slight increase of 0.06% on the MCX, while silver futures for September delivery fell by 1.13%. During trading, gold futures were priced at ₹1,41,599 per 10 grams, and silver futures at ₹2,17,488 per kilogram.
According to data from the India Bullion and Jewellers Association (IBJA), the price of 10 grams of 999 purity gold was ₹1,42,860 on Friday, down from ₹1,44,532 at the market’s opening on Monday. This indicates a decrease of ₹1,672 or 1.15% over the week.
In terms of silver, the IBJA reported that the price for 999 purity silver was ₹2,18,295 per kilogram on Friday, compared to ₹2,24,771 at the start of the week. This reflects a weekly decline of ₹6,476 or 2.88%.
Throughout the week, both gold and silver experienced fluctuations. Following the Federal Reserve’s decision to maintain interest rates, gold saw a rise of about 2%. However, as the dollar weakened towards the end of the week, gold extended its gains until Thursday.
Market experts noted that silver traded within a relatively narrow range, as investors awaited further insights into the Federal Reserve’s monetary policy and new global economic indicators. This has created a cautious atmosphere in the precious metals market.
Analysts observed significant volatility in the commodity market this week. Tensions between the U.S. and Iran fluctuated, impacting market stability. Although crude oil prices softened, rising inflation fears bolstered U.S. Treasury yields and the dollar, thereby affecting demand for non-interest-bearing investments like gold.
The Federal Reserve’s relatively hawkish stance, a strong labor market, and recent increases in oil prices have diminished expectations for interest rate cuts in the near future. The market currently estimates a 63% likelihood of an interest rate hike in September.
In geopolitical developments, the Iranian Revolutionary Guard’s actions in the Strait of Hormuz and Saudi Arabia’s initiative to form a coalition of 43 nations for maritime security in the Red Sea have heightened tensions.
Experts believe that a lasting ceasefire in the region could ease energy price pressures, improve global investors’ risk appetite, and provide additional support for precious metals like gold and silver.
Technically, gold is facing major resistance at $4,160-$4,180 per ounce on COMEX, while strong support is seen at $4,090-$4,070. For MCX gold, the nearest resistance is at ₹1,44,000-₹1,44,300, with major support at ₹1,43,000-₹1,43,300.
In the coming days, investors will focus on U.S. inflation and employment data, comments from Federal Reserve officials, U.S. Treasury yields, and the U.S. dollar index. These factors will determine the future direction of gold and silver prices.
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