Gold Prices Set for Firm Week Amid Growing Fed Rate Cut Speculation

Gold prices are expected to stay firm in the coming week, supported by safe-haven demand and growing expectations of policy easing by the US Federal Reserve, while silver may see a phase of consolidation after its sharp recent rally, analysts told news agency PTI. Market participants will closely track a packed global data calendar, including inflation numbers from major economies, the US Personal Consumption Expenditures (PCE) index, GDP growth figures, PMI data and jobless claims, all of which could offer fresh clues on the future course of US monetary policy. “The focus will be on the upcoming economic numbers from China – crucial from an industrial metals perspective. Among other developments, US President Donald Trump’s speech at the World Economic Forum and the Supreme Court judgement on trade will be most important to watch,” said Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd. On the domestic front, gold futures on the Multi Commodity Exchange (MCX) rose Rs 3,698, or 2.7 per cent, over the past week, touching a record high of Rs 1,43,590 per 10 grams on Wednesday. “Gold prices on the domestic market were up 2.7 per cent for the week, partly supported by a weaker rupee against the dollar. Later, the yellow metal pared some gains on Friday amid profit-booking and long-liquidation, as the risk premium eased following the US President’s softer tone on Iran, better-than-expected jobs data, and a firm dollar,” Mer said. In the international market, Comex gold futures climbed USD 94.5, or 2.09 per cent, last week, closing at USD 4,595.4 per ounce on Friday after hitting a record high of USD 4,650.50 earlier in the week. “Gold prices rose by more than 2 per cent over the week amid geopolitical risk coming out of Iran, driving strong investor interest in safe haven assets. Expectations of interest rate cuts by the US Fed, a weaker dollar, lower treasury yields and continued central bank buying remain supportive for the yellow metal,” said Prathamesh Mallya, DVP–Research, Non-Agri Commodities and Currencies, Angel One. Mallya expects gold prices to extend gains towards Rs 1,46,000 per 10 grams on the MCX and around USD 4,750 per ounce in global markets in the near term. Silver, meanwhile, saw an exceptional rally, jumping nearly 14 per cent, or Rs 35,037, on the MCX during the week to hit a lifetime high of Rs 2,92,960 per kilogram. Globally, silver prices gained USD 9.2, or 11.6 per cent, to close at USD 88.53 per ounce, after touching a record high of USD 93.75 last week. “Silver’s parabolic rally continued as prices gained more than 11.5 per cent for the week, as some profit-booking and consolidation were seen in the last couple of trading sessions, following reports that the Trump administration won’t be levying tariffs on critical miners for now,” Mer said. While silver is likely to remain supported, analysts cautioned that the sharp surge could be followed by a correction as prices approach the USD 100 per ounce level. “We expect a big corrective move either before or after the USD 100 is breached,” Mer added. Vijay Kuppa, CEO of InCred Money, said both gold and silver remain structurally positive despite near-term volatility. “Central banks are adding gold to their reserves, while ETF inflows are absorbing a significant portion of supply. Geopolitical tensions and persistent macroeconomic uncertainty reinforce the role of holding precious metals as portfolio hedges,” he said. On silver, Kuppa noted that its dual role as both a precious and industrial metal continues to support long-term demand. “After an extended rally, phases of consolidation and price corrections are normal. Short-term pullbacks do not necessarily change the broader trend and are often part of the price-discovery process,” he added. *With Agency Inputs