Gold Prices Hold Near 7-Week High; MCX Gold Gains, Silver Sees Profit Booking
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Investors are now looking to Friday's US non-farm payrolls report for clues on the Federal Reserve's next policy move after weaker employment data eased rate-hike expectations. Gold continues to benefit from lower Treasury yields and a softer dollar, while silver's recent rally paused amid profit booking.
Gold prices traded higher on Thursday, supported by fresh buying in the domestic market and firm global cues, while silver slipped as traders booked profits after recent gains.
On the Multi Commodity Exchange (MCX), October gold futures settled ₹654, or 0.44%, higher at around ₹1.49 lakh per 10 grams, while September silver futures declined ₹792, or 0.35%, to around ₹2.26 lakh per kg by the close of trade.
In the international market, spot gold traded near $4,270 an ounce, holding close to a seven-week high, while silver hovered around $62 an ounce.
Why Are Gold Prices Holding Firm?
Gold continued to find support from a weaker US dollar and lower US Treasury yields after recent economic data strengthened expectations that the Federal Reserve could take a less aggressive approach on interest rates.
According to Kotak Neo Commodity Research, spot gold extended its rally for a fourth straight session after optimism over progress towards reopening the Strait of Hormuz eased concerns over energy-driven inflation. Markets also lowered the probability of a September US rate hike to 55% from 67% earlier this week following weaker-than-expected US private payrolls data.
San Francisco Federal Reserve President Mary Daly also reiterated that policymakers could afford to keep interest rates steady until more inflation data becomes available, supporting sentiment in bullion markets.
Why Did Silver Prices Ease?
Silver edged lower after a strong rally in recent sessions as traders locked in profits.
Despite Thursday's decline, the metal remained close to multi-year highs. Analysts said the broader trend continues to be supported by industrial demand from sectors such as renewable energy and electronics, although near-term price movements are likely to be driven by macroeconomic data and investor positioning.
The market's attention has now shifted to Friday's US non-farm payrolls report, which is expected to provide fresh clues on the Federal Reserve's policy path.
A softer labour market reading could reinforce expectations of lower interest rates, a positive for non-yielding assets such as gold. On the other hand, stronger-than-expected employment data could revive expectations of tighter monetary policy and limit gains in bullion.
Investors will also continue to monitor developments in West Asia, where any setback in US-Iran diplomacy could quickly revive market volatility.
MCX Gold & Silver Technical Outlook
According to Kotak Neo Commodity Research, MCX Gold (October) has immediate support at ₹1,48,987, followed by ₹1,48,461 and ₹1,46,760. Resistance is placed at ₹1,50,687, ₹1,51,213 and ₹1,52,914.
For MCX Silver (September), support is seen at ₹2,25,458, ₹2,24,246 and ₹2,20,323, while resistance is placed at ₹2,29,382, ₹2,30,594 and ₹2,34,517.
Kotak Neo Commodity Research said easing rate-hike expectations continue to support bullion. However, any resurgence in inflation concerns, hawkish comments from Federal Reserve officials or a setback in US-Iran diplomacy could increase volatility and cap further gains in gold.
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This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, visit www.kotakneo.com/disclaimer.
Rochelle Britto is a business journalist with 8+ years of experience in financial journalism. She covers equity markets, corporate earnings, IPOs, commodities and the economy.
As a reporter with leading business publications, she has tracked financial markets and covered sectors including banking and financial services, retail, consumer goods, advertising and e-commerce.
Outside work, she enjoys travelling, discovering local cultures and spending time in nature.
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