Analysts predict that gold prices will stay strong over the next week due to investor attention on the US Federal Reserve’s monetary policy result and the rupee’s decline.
They said that despite anticipations of an interest rate reduction and ongoing central bank purchases, the precious metal’s bias is still favorable.
Pranav Mer, Vice President of EBG-Commodity & Currency Research at JM Financial Services Ltd., said that gold is likely to maintain its upward trend. Market participants will closely track the US Federal Reserve’s FOMC decision and remarks from Fed Chair Jerome Powell. On the data side, China’s trade and inflation numbers, along with US employment figures, will also play a crucial role in shaping market sentiment.
Gold futures on the Multi Commodity Exchange (MCX) outperformed world prices last week, rising by Rs 958, or 0.74 percent.
Due to the rupee’s decline versus the dollar, gold prices in Indian markets have increased higher than Comex gold prices. According to Prathamesh Mallya, DVP-Research, Non-Agri Commodities and Currencies, Angel One, the rupee is currently at its maximum point of 90, making gold more expensive in Indian currency.
According to Mallya, the rate decrease, rising central bank demand for gold, and fund purchases might all contribute to the gold price increase in the next week.
Comex gold futures fell USD 11.9, or 0.28 percent, during the course of the week on the global markets.
According to Mer, gold prices were stable during the week due to a declining dollar and growing expectations that the Federal Reserve (Fed) will lower interest rates at its meeting on December 10.
In the meantime, silver continues to surpass gold, reaching new all-time highs due to industrial demand.
Silver futures on the MCX surged by Rs 8,427, or 4.81 percent, during the course of the week. The white metal touched a record of Rs 1,85,234 per kilogram on Friday after rising by Rs 7,096, or 3.98%.
Silver futures rose near Rs 1.80 lakh per kilogram in the first part of the week and momentarily reached new highs. Since then, prices have somewhat decreased but are still experiencing significant monthly increases, according to Chirag Doshi, CIO-Fixed Income at LGT Wealth India.
After a successful run, he said, markets are stabilizing at higher levels, and traders are increasingly taking advantage of big intraday increases in silver to book gains.
Comex silver futures increased by USD 1.89, or 3.30 percent, in the foreign markets throughout the course of the week. The metal reached a record high of USD 59.90 per ounce on Friday after rising by USD 2.4, or 4.19%.
Mer attributed the increase to high industrial demand and limited supply. “Silver prices surged to yet another all-time high and moved near to USD 60 per ounce on the international market, while on the local market, prices rose close to Rs 1,90,000 per kilogram,” Mer stated.
In the near future, he continued, the trend may drive silver prices between Rs 2,00,000 and Rs 2,25,000.
The upcoming week will be critical for bullion prices, according to analysts, as rupee movements, macroeconomic data from China and the US, and monetary policy inputs from the Fed will determine direction.
