With immediate resistance at Rs 1,05,100 per 10 gramme and later resistance at Rs 1,06,860 per 10 gramme, the gold rally is anticipated to continue into the next week.
Dollar Movement Amid Fed
As investors considered ongoing inflation worries, mounting political pressure on the Federal Reserve, and mounting expectations for a September rate decrease, markets completed a tumultuous week (ending August 29) on a turbulent note.
In reaction to Fed Chair Powell‘s dovish approach at the Jackson Hole Symposium, the dollar started the week with a solid comeback after a significant fall the Friday before.
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Stronger-than-expected US new home sales data for July further helped the dollar spike to 98.7. But mounting pressure on the Fed to lower interest rates, Trump’s demands for the removal of Fed Governor Lisa Cook, and dovish remarks from Fed Governor Christopher Waller held the dollar in a narrow range.
US Inflation and Dollar
There was no hawkish surprise in Friday’s US PCE inflation data, which was in line with forecasts. This boosted market confidence in a rate cut in September, with odds at 87%.
Core PCE increased to 2.9% in July, its highest level since February, indicating ongoing price pressures that may temper expectations for more rate cuts, while the dollar remained strong above 98.
Later, as markets watched a federal court hearing where Trump encouraged a judge to reject Cook’s plea to continue on the Fed Board, the dollar fell below 98 and closed the week flat. However, the session ended without an instant verdict.
Stocks Fall, Metals Surge
US stocks fell, while precious metals saw a steep increase as a result of this extraordinary judicial battle and heightened global concerns. While COMEX gold rose beyond $3,518 per troy ounce, closing the week with a 3% gain, silver rise over $40 per ounce for the first time since 2011.
Growing international tensions, as Britain, France, and Germany warned Iran of fresh UN penalties over its nuclear program, fueled demand for safe havens.
MCX Gold Futures Outlook
The daily chart’s significant advance in MCX GOLD futures on Friday validated a breakout from the Ascending Triangle pattern. With a bullish bias, prices are now holding above the 20 EMA and the Supertrend (7,3).
With immediate resistance at Rs 1,05,100 per 10 gramme and later barrier at Rs 1,06,860 per 10 gramme, the rise is probable to continue into the next week. On the downside, Rs 1,02,000 per 10 grammes is the first support, followed by Rs 1,01,200.