1 week ago
Gold Gains Nearly 5 Percent Weekly as Dollar Weakens
Gold became more expensive this week, rising by almost 5 percent.
One reason was that the US dollar became weaker.
Investors also thought the Federal Reserve was less likely to raise interest rates soon.
Lower US inflation and weaker shopping activity helped create this expectation.
A United States Treasury bond-buyback announcement also pushed some bond yields lower.
These changes made gold and silver more attractive to investors.
Higher oil prices and tensions involving Iran added further support.
In India, a slightly weaker rupee made imported gold more expensive.
Gold prices rose nearly 5 percent for the week as the US dollar weakened and expectations of an imminent Federal Reserve rate hike declined.
MCX October gold futures were flat on Friday, while September silver futures rose 1.28 percent to Rs 2,46,360 per kg.
The price of 10 grams of 24-carat gold increased to Rs 1,58,860 on Friday from Rs 1,54,066 at Monday’s market opening.
Softer US inflation, weaker retail activity and subdued consumer sentiment led markets to largely price out a September rate increase.
Higher crude prices, West Asia tensions and a weaker Indian rupee also supported domestic gold and silver prices.
- Who
- Gold and silver traders, investors, the Federal Reserve, the United States Treasury and commodity markets were involved.
- What
- Gold prices gained nearly 5 percent during the week, while silver also advanced.
- Where
- The price changes were reported in Indian markets, including MCX, with international factors from the United States and West Asia.
- When
- The weekly movement was reported on Friday; 24-carat gold prices were compared with Monday’s opening levels.
- Why
- A weaker US dollar, reduced expectations of a near-term US rate hike, lower Treasury yields, higher crude prices and a weaker Indian rupee supported precious metals.
Key facts
- Weekly gold gain
- Nearly 5 percent
- Friday MCX gold
- October futures were flat at Rs 1,62,440
- Friday MCX silver
- September futures rose 1.28 percent to Rs 2,46,360 per kg
- 24-carat gold
- Rs 1,58,860 per 10 grams on Friday
- Monday gold price
- Rs 1,54,066 per 10 grams at market opening
- WTI crude
- Rose around 5.7 percent for the week and traded above $86 per barrel
- MCX gold levels
- Resistance at Rs 1,62,500–Rs 1,63,000; support at Rs 1,58,500–Rs 1,59,000
Quotes
Market participant
An unnamed market participant commenting on factors supporting precious metals.
“A temporary pullback in Treasury yields following the buyback announcement, along with softness in the US dollar, created a supportive backdrop for gold and silver, while concerns over the U.S. fiscal outlook remained in focus.”
thehansindia.com
Sources
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