Gold prices achieved a six-week peak amid weaker US dollar and subdued US labour market data, reducing expectations of imminent Federal Reserve rate hikes and boosting bullion appeal as a safe haven amid geopolitical tensions.
Gold prices ended the week sharply higher as a weaker US dollar and softer labour-market data reduced expectations that the Federal Reserve will tighten policy again in the near term. On the Multi Commodity Exchange, October gold futures rose 0.11% on Friday and September silver futures added 0.15%, while the domestic benchmark for 10 grams of 24-carat gold climbed to Rs 1,49,621 from Rs 1,42,863 at the start of the week, according to data from the India Bullion and Jewellers Association.
The move came after a disappointing US employment report showed the economy added 23,000 jobs in July, far below forecasts for about 80,000, while prior months were revised lower by roughly 1,03,000 jobs. Reuters reported that traders quickly pared the odds of a September rate hike, with market pricing falling to about 44% from roughly 58% before the data, helping push the benchmark 10-year Treasury yield down to around 4.60% from an intraday peak of 4.68%.
Gold had begun the week under pressure as geopolitical fears eased after the postponement of a planned US strike on Iran, but it reversed course once the employment figures renewed bets on eventual rate cuts. S&P Global said bullion later pushed to new highs in August 2024 as cooling labour data, softer inflation and tension in the Middle East reinforced its appeal as a hedge against uncertainty. Similar forces helped drive gold to a six-week high in July, when the weaker dollar and rising hopes of Fed easing lifted both global prices and MCX contracts, while Kitco reported that the metal later held above $2,500 an ounce as rate-cut optimism deepened.
Market watchers are now focused on the next inflation reading, which could either strengthen the case for easier policy or revive concern that the Federal Reserve may stay cautious for longer. For the moment, lower yields and a softer dollar are still providing support, but analysts also note that shifting headlines around the Strait of Hormuz and broader geopolitical risks could keep volatility elevated in both gold and silver.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
