Gold prices are anticipated to remain strong in the upcoming week due to a mix of global monetary easing, increased festive demand in Asia, central bank purchases, and ongoing geopolitical uncertainties, according to analysts. Traders are expected to keep a close eye on the forthcoming trade negotiations between the US and India, as well as between Washington and Beijing, alongside preliminary data on manufacturing and services PMI from various regions. Key US macroeconomic indicators, including housing data, personal consumption expenditures, and consumer sentiment, will also influence market sentiment.
Pranav Mer, Vice President of EBG – Commodity & Currency Research at JM Financial Services, noted that the bullion market is likely to be supported by robust festive demand in Asia, with ETFs and central banks continuing as net buyers. Meanwhile, safe-haven buying appears mixed at these elevated prices. On the Multi Commodity Exchange (MCX), gold futures for October delivery increased by ₹1,616, or 1.5%, last week, closing at ₹1,09,900 per 10 grams on Friday. Mer indicated that gold prices rebounded from a mid-week decline and finished the week positively, with attention shifting to the US economic data, especially inflation and employment statistics.
Prathamesh Mallya, DVP of Research for Non-Agri Commodities and Currencies at Angel One, mentioned that gold prices have been stabilizing following the US Federal Reserve’s decision to lower interest rates by 25 basis points, with two additional cuts anticipated in the near future. While gold prices saw a slight correction post-announcement due to a rise in the dollar index, the overall direction of the gold market appears optimistic, with momentum leaning towards higher prices. In the global market, gold futures closed at $3,705.80 per ounce on Saturday, after reaching an all-time high of $3,744 per ounce on Wednesday.
Gold began the week with some profit-taking following record highs, but losses were curtailed by weak US jobs data and a depreciating rupee. Market sentiment was also impacted by unexpectedly high inflation data, softer labor market statistics, and a significant drop in non-farm payrolls, prompting participants to anticipate at least a 25 basis points interest rate cut.
