Gold posts 4.73 pc weekly gain as US Fed rate hike bets weaken

Gold prices gained 4.73 per cent during the week as a weaker US dollar, falling Treasury yields and softer-than-expected labour data reduced expectations of further Federal Reserve rate hikes. Gold climbed to a seven-week high following the jobs report

Mumbai: Gold prices surged 4.73 per cent on a weekly basis as the US Dollar weakened and weaker‑than‑expected US labour data cut the odds of further US Federal Reserve tightening.

On Friday, gold futures (October) gained 0.11 per cent while silver futures (September) advanced 0.15 per cent on the Multi Commodity Exchange (MCX). The yellow metal stood at Rs 1,51,985, while the white metal was at Rs 2,31,804 per kg.

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The price of 10 grams of 24-carat gold was at Rs 1,49,621 on Friday, up from Rs 1,42,863 seen on Monday at market opening, according to data published by the India Bullion and Jewellers Association (IBJA).

Gold and silver benefited from declining Treasury yields and a softer US dollar, while crude oil remained volatile amid shifting headlines surrounding a potential agreement to reopen shipping through the Strait of Hormuz.

The US employment report that came this weekend showed the economy unexpectedly 23,000 jobs in July, compared to forecasts for an increase of about 80,000.

“Earlier payroll data were also revised sharply lower, with revisions to the previous two months wiping out roughly 1,03,000 jobs,” an analyst said.

The softer labour picture, together with weaker ADP private payrolls and other employment indicators, trimmed market expectations for a September Fed rate hike to about 44 per cent from roughly 58 per cent.

Treasury yields fell in response, with the benchmark 10-year yield easing to around 4.60 per cent from an intraday high of 4.68 per cent, creating a supportive backdrop for precious metals.

Gold, which had started the week under pressure as geopolitical risk premiums eased following the postponement of a planned US strike on Iran, staged a sharp reversal after the employment report, climbing to a seven-week high.

Despite the shift in rate expectations, inflation remains a key risk, suggesting that the Federal Reserve’s next policy move will continue to depend on upcoming inflation and labour-market data.

Immediate resistance is placed at $4,470–$4,500, for COMEX gold, while support lies at $4,330–$4,300, according to the commodity experts.

For MCX gold, immediate resistance is placed at Rs 1,52,200–Rs 1,52,800, while the support lies at Rs 1,50,000–Rs 1,50,700, they added.

Investors closely monitor Federal Reserve communication, Treasury yields, the U.S. dollar, and developments surrounding the Strait of Hormuz.

In addition, the July US inflation report, due in the coming week, will be closely watched for fresh clues on the Federal Reserve’s policy trajectory.