4 days ago
Gold Posts Weekly Dip as Hawkish Fed Stance Lifts Rates
Gold became cheaper this week.
Prices fell after new US economic information suggested that inflation was still high.
The information also showed that the US economy might be stronger than expected.
Federal Reserve Chair Kevin Warsh gave a speech that investors viewed as favoring higher interest rates for longer.
Higher interest rates can make gold less attractive to investors.
The chance of a US rate hike in September increased in market estimates.
Silver also moved up and down during the week.
Analysts identified price levels where gold might find support or face resistance.
Gold prices fell nearly 1.86% over the week as stronger US economic data and a hawkish Federal Reserve speech pressured bullion.
MCX October gold futures dropped 1.63% on Friday to Rs 1,56,400, while September silver futures fell 1.66% to Rs 2,36,651 per kilogram.
The price of 10 grams of 24-carat gold declined from Rs 1,62,603 on Monday to Rs 1,59,578 on Friday, according to the India Bullion and Jewellers Association.
US July PCE inflation reached 3.7% year-on-year, while labour and trade data suggested a stronger-than-expected economy.
Markets increased the probability of a September rate hike, while analysts placed MCX gold support at Rs 1,56,200–Rs 1,55,500 and resistance at Rs 1,59,200–Rs 1,60,000.
- Who
- Gold and silver markets, US Federal Reserve Chair Kevin Warsh, and investors reacting to US economic data.
- What
- Gold prices fell nearly 1.86% over the week, while silver also declined on Friday.
- Where
- The prices cited are from Indian markets, including the Multi Commodity Exchange of India; Warsh spoke at the Jackson Hole symposium.
- When
- The decline was reported on Friday after trading during the week; the cited US PCE data was for July.
- Why
- Stronger US inflation, labour and trade data, together with Warsh’s hawkish speech, increased expectations that the Federal Reserve could keep interest rates restrictive for longer.
Key facts
- Weekly gold decline
- Nearly 1.86%
- MCX October gold
- Rs 1,56,400 on Friday, down 1.63%
- MCX September silver
- Rs 2,36,651 per kilogram on Friday, down 1.66%
- 24-carat gold price
- Rs 1,59,578 per 10 grams on Friday, compared with Rs 1,62,603 on Monday
- US July PCE inflation
- 3.7% year-on-year
- September rate-hike odds
- Rose from roughly one-in-three to more than two-in-five
- MCX gold levels
- Resistance at Rs 1,59,200–Rs 1,60,000; support at Rs 1,56,200–Rs 1,55,500
Sources
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