Why Are Gold Prices Rising Today? Here's The Full Picture

Gold prices extended their gains in the futures market on Friday, August 7, supported by fresh buying, a firm global trend and expectations that easing inflation pressures could give the US Federal Reserve more room to cut interest rates.

On the Multi Commodity Exchange, gold futures for October delivery rose Rs 1,272, or 0.85%, to Rs 1.50 lakh per 10 grams. Trading volumes stood at 1,283 lots. Globally, gold futures rose 1.13% to $4,287.50 an ounce in New York.

Why Are Gold Price Rising?

The rally in precious metals has been supported by a combination of lower US Treasury yields, expectations of easing inflation pressures, a softer dollar and continued demand for precious metals. Gold has gained sharply over the course of the week, with bullion on track to close with a weekly gain of about 5%.

Gold found additional support earlier in the week as optimism over easing tensions between the US and Iran improved the broader market outlook and reduced inflation concerns. Crude oil prices also fell sharply through the week, declining more than 7% as concerns over supply disruptions in the Middle East eased, briefly slipping below $80 a barrel before recovering above $83. Lower crude prices have helped ease inflationary pressures, creating a favourable backdrop for non-yielding assets such as gold.

Softer US economic data added to the bullish sentiment. The ADP National Employment Report showed private payrolls increased by just 44,000 jobs in July, well below expectations and following a downwardly revised 95,000 jobs in June, strengthening bets that the Federal Reserve could adopt a less hawkish stance. However, weekly jobless claims fell to 199,000, below the expected 205,000, pointing to continued labour market resilience, a factor that could support a higher-for-longer rate outlook if sustained.

US Jobs Data Now In Focus

Investors are closely watching the US non-farm payrolls report due later on Friday for fresh cues on the Federal Reserve's policy path. A weaker labour market reading could strengthen expectations of lower interest rates, typically supportive for gold. Market participants will also continue monitoring developments in the Middle East, along with next week's US inflation data, for further direction on bullion prices.

Gold Price Outlook

Motilal Oswal has laid out its outlook for gold in the second half of 2026, stating that bullion will be driven more by inflation, US economic data and interest rate expectations than geopolitical tensions. The brokerage expects near-term volatility amid uncertainty over Fed policy and the Middle East situation, and has flagged a possible 6-8% correction before gold resumes its uptrend. It sees gold targeting $4,800 and later $5,500-plus over the next 12-15 months, with MCX gold projected to reach Rs 1,68,000 and later Rs 1,93,000 per 10 grams.

Rupee Impact On Domestic Prices

For Indian investors, international gold prices are only one part of the equation. The rupee-dollar exchange rate, import-related costs and domestic demand also influence local gold prices. With the rupee around Rs 95.22 against the US dollar, currency movements can amplify or offset changes in international bullion prices.

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