Gold Prices to Witness Consolidation Ahead of Central Bank Meetings and Geopolitical Triggers
Gold prices are likely to witness some consolidation in the domestic markets next week as investors brace for a series of key central bank meetings and global trade developments, analysts said. Investors will keenly follow the US Federal Reserve’s policy outcome and remarks from Fed Chair Jerome Powell for cues on the interest rate decision.
The US President Donald Trump and his Chinese counterpart Xi Jinping’s meeting in South Korea, and the European Central Bank’s policy review on Thursday are also expected to steer the trajectory of precious metal prices, they added. For more information on gold prices, visit our website.
Factors Affecting Gold Prices
Gold prices closed in negative for the first time in ten trading weeks, on profit-booking at recent tops, weakening physical demand in Asian centres like India & China, and further weighed by a stronger US dollar, said Pranav Mer, Vice President, EBG — Commodity & Currency Research, JM Financial Services Ltd. He said physical demand in India weakened in the latter part of the week as buyers trimmed purchases in anticipation of a deeper price correction while lower prices sparked buying interest in China and Singapore.
On the Multi Commodity Exchange, gold futures for December delivery fell by Rs 3,557, or 2.80%, during a holiday-shortened week. For more information on multi commodity exchange, visit our website.
Impact of US-China Trade Relations on Gold Prices
The latest selloff in gold prices follows profit-taking by investors amid a record run in the bullion market. Additionally, signs of a thaw in US-China trade relations and a possible positive outcome in trade talks between New Delhi and Washington have also bolstered the risk-off sentiment, pushing gold prices lower, said Prathamesh Mallya, deputy vice president – Research, Non-Agri Commodities and Currencies, Angel One.
On the global front, Comex gold futures dropped $75.5, or 1.8%, over the week. The yellow metal hit an all-time high of $4,398 per ounce on Monday but tumbled by $266.4, or 6.11%, on Tuesday, marking its biggest one-day fall in over a decade. For more information on comex gold futures, visit our website.
Technical Analysis of Gold Prices
Gold witnessed its sharpest one-day decline in over a decade this week, retreating more than 6 per cent as investors booked profits following a prolonged record-setting rally. The sell-off was largely technical, with prices failing to hold above the $4,300 an ounce level, said Riya Singh — Research Analyst, Commodities and Currency, Emkay Global Financial Services.
She added that renewed optimism about US-China trade discussions and a firmer dollar also capped safe haven flows to gold. The sharp reversal is due to months of speculative positioning tied to expectations of deeper rate cuts by the Fed and concerns about fiscal weakness. Despite the steep correction, the broader outlook for gold remains bullish, she said.
Outlook for Silver Prices
Silver, too, succumbed to profit-taking after its recent record-setting rally. On the MCX, white metal futures for December delivery crashed by Rs 9,134, or 5.83%. In the international markets, silver futures shed 3.02% in the past week. It had hit a record of $53.76 per ounce on Oct. 17. The white metal suffered losses by over 8 per cent, marking its steepest one-day fall since 2021, to touch $47.12 per ounce on Oct. 21.
For more information on silver prices, visit our website. Silver’s fundamental outlook remains robust, supported by rising industrial demand from the solar photovoltaic and electric vehicle sectors, said Riya Singh.
Conclusion
Gold prices are expected to witness some consolidation in the domestic markets next week as investors await key central bank meetings and global trade developments. The US Federal Reserve’s policy outcome and remarks from Fed Chair Jerome Powell will be closely watched for cues on the interest rate decision. For more information on gold investing, visit our website.