Gold and silver prices could continue their upward rally next week, but the momentum will depend on geopolitical and economic cues.
Analysts expect bullion to remain firm as markets weigh the latest developments in the Middle East alongside inflation, trade and other global cues.
Markets will keep an eye on US housing and trade data, inflation figures from the UK, Eurozone and Japan, and China’s economic indicators for cues on industrial metals. The minutes of the Federal Reserve’s FOMC meeting will also be closely watched for signals on the US central bank’s monetary policy outlook.
"The outlook for gold and silver remains positive and are expected to move up towards Rs 1.57 lakh per 10 grams and Rs 2.54 lakh per kg level," Pranav Mer, senior vice president, EBG - commodity & currency research, JM Financial Services Ltd, told PTI.
On the domestic front, gold futures for October delivery gained Rs 2,686, or nearly 2 per cent, last week to close at Rs 1.54 lakh per 10 grams on the Multi Commodity Exchange (MCX). Silver futures for September delivery rose Rs 4,458, or 1.9 per cent, to Rs 2.35 lakh per kilogram.
"Gold traded higher this week, gaining 1 per cent, while the rally extended more than 2 per cent at the peak before profit-booking emerged at higher levels," said Jateen Trivedi, VP research analyst, commodity and currency, LKP Securities.
The sharp August run-up could, however, bring some pauses. MCX gold has gained nearly 9.5 per cent this month, making consolidation and intermittent profit-booking at higher levels more likely in the near term, Trivedi said.
Internationally, Comex gold futures for December delivery rose $37.6, or nearly 1 per cent, last week to $4,437.3 per ounce. Silver gained $1.61, or 2.5 per cent, to $65.11 an ounce in New York.
Gold futures have now closed higher for a second consecutive week, though the metal remained in consolidation after an 11 per cent rally from below $4,000 per ounce, Mer said.
Bullion prices found support after traders pared back bets on a September rate hike by the US Fed following weaker-than-expected non-farm payroll data and steady inflation. Other economic indicators remained mixed, he said.
Gold also continued to draw safe-haven demand amid the Middle East conflict and US-Iran tensions over the Strait of Hormuz, with no resolution to the conflict in sight, Mer added.
Silver, too, held on to its positive bias, although prices consolidated as the recent rally in industrial metals paused.
For bullion investors, the focus now remains firmly on three familiar forces. According to Trivedi, the US dollar, interest-rate expectations and geopolitical developments will remain the key drivers for bullion prices.
