Gold Prices- Rise for First Weekly Gain Since May Amid Fed Signals
Gold Prices- Gold prices posted their first weekly advance since May after investors scaled back expectations of additional interest rate increases by the US Federal Reserve. Bullion gained nearly 3.1 per cent during the week, supported by weaker employment figures in the United States, lower energy costs and a softer dollar.
Bullion Futures Show Limited Movement on Friday
Domestic bullion futures remained largely steady in Friday’s trade. MCX gold futures for August delivery slipped marginally by 0.01 per cent to Rs 1,47,365. Silver futures for July delivery edged up 0.04 per cent and were quoted at Rs 2,37,499 per kg.
Despite the muted session on Friday, gold prices remained higher than levels seen at the beginning of the week. The movement reflected renewed buying interest after a prolonged period of pressure in the bullion market.
IBJA Data Shows Weekly Increase in Gold Rates
According to figures released by the India Bullion and Jewellers Association, the price of 24-carat gold stood at Rs 1,46,344 per 10 grams on Friday. At the opening of trade on Monday, the same quantity was priced at Rs 1,41,911.
The increase came after gold faced steady selling for more than a month following the import duty increase announced on May 13. Market sentiment improved as international factors turned more favourable for precious metals.
Softer Dollar Supports Recovery in Gold
Analysts said gold extended its upward movement for the fourth straight session and reached a 10-day high on Friday. The decline in the US Dollar Index helped make bullion more attractive for overseas buyers, leading to fresh demand in global markets.
The recent recovery has also eased concerns among traders who had seen gold remain under pressure through much of the previous month. A weaker dollar generally supports gold because the metal becomes relatively less expensive for buyers holding other currencies.
Market experts expect gold to remain influenced by overseas developments in the coming sessions. The expected trading range for domestic bullion is between Rs 1,45,000 and Rs 1,49,000, depending on currency movement, US economic data and signals from the Federal Reserve.
US Labour Data Changes Rate Hike Expectations
The latest US employment figures played an important role in strengthening gold prices. Hiring in the United States slowed sharply in June, indicating that the labour market may be losing some momentum.
Following the data, traders reduced the likelihood of a quarter-point interest rate hike at the Federal Reserve’s next policy meeting. The probability fell below 20 per cent, compared with nearly one-third earlier in the week.
Lower expectations of further rate increases are usually positive for gold. Higher interest rates raise the appeal of interest-bearing assets, while a softer rate outlook can improve demand for non-yielding assets such as bullion.
Falling Energy Costs May Ease Inflation Pressure
Energy prices have also contributed to the changing market outlook. Oil has recorded its steepest quarterly decline since 2020 as crude shipments from Saudi Arabia and the United Arab Emirates moved closer to pre-war supply levels.
The fall in energy costs, combined with slower job growth, has led several analysts to expect inflation pressures to ease gradually in the months ahead. If inflation continues to moderate, the Federal Reserve may face less pressure to keep monetary policy restrictive.
Federal Reserve Independence Remains a Market Focus
Investors are also watching developments around the Federal Reserve’s leadership and independence. US President Donald Trump and his allies have renewed efforts to create space for more presidential appointments at the central bank after the Supreme Court blocked an attempt to remove Federal Reserve Governor Lisa Cook.
Concerns over possible changes in the Federal Reserve’s functioning had supported gold demand in the past. Similar debate last year contributed to a rally in bullion as investors looked for protection against uncertainty surrounding economic and policy decisions.