Gold Prices to Remain Firm Ahead of US Federal Reserve Decision
Gold prices are likely to remain firm in the coming week, driven by investor focus on the US Federal Reserve’s monetary policy outcome, combined with weakness in the rupee, according to analysts. The precious metal’s bias remains positive amid expectations of an interest rate cut and sustained central bank purchases, they added.
According to Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd, gold prices are expected to remain on the positive side as traders will be focusing on the US Federal Reserve’s FOMC meeting outcome and the Fed Chair Jerome Powell’s commentary as well, while on the data front, the focus will be on China’s trade and inflation data and the US jobs data.
Gold Prices in Indian Markets
On the Multi Commodity Exchange (MCX), gold futures appreciated by Rs 958, or 0.74%, this week, outperforming the global prices. Prathamesh Mallya, DVP – Research, Non-Agri Commodities and Currencies, Angel One, said that gold prices in the Indian markets have rallied more than the Comex gold prices on account of rupee depreciation against the dollar.
Mallya added that the rally in gold prices might continue in the week ahead as a boost from the rate cut, increasing central bank demand for gold, and fund buying. In the international markets, Comex gold futures slipped by $11.9, or 0.28%, during the week.
Silver Continues to Outshine Gold
Meanwhile, silver continues to outshine gold, scaling fresh record highs on industrial demand. On the MCX, silver futures skyrocketed by Rs 8,427, or 4.81%, during the week. On Friday, the white metal surged by Rs 7,096, or 3.98%, to hit a record of Rs 1,85,234 per kilogram.
Chirag Doshi, CIO- Fixed Income, LGT Wealth India, said that markets are consolidating at higher levels after a strong run, with traders increasingly using sharp intraday spikes in silver as opportunities to book profits. In the overseas markets, Comex silver futures rose by $1.89, or 3.30 during the week.
Outlook for the Coming Week
Analysts said the coming week will be crucial for bullion prices as monetary policy cues from the Fed, macroeconomic data from China and the US, and rupee trends will guide direction. Mer attributed the rally to strong industrial demand and tight supplies, and added that the momentum could push silver prices towards Rs 2,00,000-2,25,000 levels in the short term.
For Indian investors looking to invest in gold or silver, it’s essential to keep an eye on the US Federal Reserve’s monetary policy outcome and the movement of the rupee against the dollar. A weaker rupee could lead to higher gold prices in the Indian markets, making it an attractive investment option for those looking to hedge against inflation or currency fluctuations.
Meanwhile, silver investing has been gaining popularity in recent times, driven by its increasing demand in the industrial sector. With silver prices expected to continue their upward trend, it could be an attractive investment option for those looking to diversify their portfolio.
Key Takeaways
- Gold prices are expected to remain firm ahead of the US Federal Reserve’s monetary policy outcome.
- Silver continues to outshine gold, scaling fresh record highs on industrial demand.
- The coming week will be crucial for bullion prices as monetary policy cues from the Fed, macroeconomic data from China and the US, and rupee trends will guide direction.
Stay tuned for more updates on the gold and silver prices and their impact on the Indian markets. For more information on investing in gold and silver, visit our website.