Gold posts nearly 1.86 pc weekly dip over hawkish stance of US Fed Reserve
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Gold prices fell about 1.86 percent after investors reacted to higher‑than‑expected inflation figures and a hawkish debut address by US Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium.
Key Takeaways
- Gold prices fell about 1.86% weekly after hawkish comments from new US Fed Chair Kevin Warsh at Jackson Hole.
- MCX October gold contracts dropped 1.63% and September silver fell 1.66%, with gold near Rs 1,56,400 and silver near Rs 2,36,651/kg.
- 24-carat gold fell to Rs 1,59,578 per 10 grams from Rs 1,62,603 at the start of the week, per IBJA data.
- Higher-than-expected US PCE inflation at 3.7% year-on-year and strong labour data reversed an earlier bullion rally driven by currency-debasement fears.
On Friday, MCX gold contracts for October delivery slipped 1.63 percent, and September silver contracts declined 1.66 percent. Gold futures traded near Rs 1,56,400, while silver futures hovered around Rs 2,36,651 per kilogram.
The price for 10 grams of 24‑carat gold stood at Rs 1,59,578 on Friday, down from Rs 1,62,603 recorded at Monday’s opening, according to figures released by the India Bullion and Jewellers Association (IBJA).
Earlier in the week gold had risen sharply, but the trend reversed when July’s US PCE inflation rose to 3.7 percent year‑on‑year, accompanied by labour and trade reports indicating a stronger‑than‑anticipated economy.
Fresh worries about currency debasement and US Treasury backing for long‑dated bonds had pushed the bullion rally to multi‑month peaks earlier in the week.
Nevertheless, stronger‑than‑expected economic data raised the market’s view that the Fed might keep policy restrictive for an extended period.
Kevin Warsh’s hawkish remarks shifted rate expectations, and oil slipped from recent peaks as signs of diplomatic progress emerged around the Strait of Hormuz.
Gold fell about $70 in the minutes following Warsh’s address before regaining some of its losses, while silver relinquished earlier gains, analysts noted.
The likelihood of a September rate increase climbed from about one‑in‑three to over two‑in‑five on the CME FedWatch tool, pushing year‑end rate expectations to their highest point in three weeks.
Silver followed a similar pattern, rising to a ten‑week peak before retreating several times during the week, while copper hit new all‑time highs before pulling back.
Analysts identify immediate resistance for Comex gold in the $4,600‑$4,630 band, with support seen in the $4,500‑$4,470 range.
For MCX gold, immediate resistance is seen in the Rs 1,59,200‑Rs 1,60,000 band, while support is found between Rs 1,56,200 and Rs 1,55,500, they added.
