Gold, silver range-bound; weak rupee lends support: Analysts
Gold and silver prices are likely to trade in a range with a slightly positive bias next week as rupee weakness cushions domestic bullion against global fluctuations, while inflation data will shape investors’ sentiment, analysts said.
Traders will track inflation readings from India, China and the US. Trade data from Beijing and speeches from Federal Reserve officials will provide cues on whether the US central bank will deliver another rate hike in October or defer it to December, they added.
“The outlook remains range-bound with a mildly positive undertone, as rupee weakness provides a cushion against global price fluctuations,” Jateen Trivedi, VP Research Analyst — Commodity and Currency, LKP Securities, said.
On the Multi Commodity Exchange (MCX), gold futures for December delivery gained `1,109, or nearly 1 per cent, last week to settle at `1.51 lakh per 10 grams. Silver, however, ended marginally lower by `122 to `2.25 lakh per kilogram.
MCX gold’s recovery was supported by a softer US dollar, easing bond yields and improved geopolitical sentiment. A decline in crude oil prices on Friday also eased immediate inflation concerns, and weakness in the rupee provided additional support to domestic bullion, Trivedi said.
“A weaker rupee increases the landed cost of imported bullion, helping MCX gold remain supported even when international prices face pressure. This currency impact could continue to cushion domestic prices against any moderate correction in Comex gold,” he added.
In overseas markets, Comex gold futures for December delivery gained 54, or 1.3 per cent, last week to close at USD 4,216.3 per ounce, while silver rose over 1 per cent to USD 61.05 per ounce.
“Gold futures ended with a weekly gain of more than 1 per cent, on bargain buying at lower levels recovering from around USD 4,066 to above USD 4,200 per ounce,” said Pranav Mer, Senior Vice President, EBG — Commodity & Currency Research, JM Financial Services Ltd.
Most of the gains came in the last two trading sessions as the dollar consolidated around the 102 level and US Treasury yields pared some recent gains, Mer said.
Silver also recovered in the last two sessions, drawing support from gold and positive momentum in industrial metals such as copper and zinc.
However, the upside was capped by concerns that high prices could weaken demand as buyers turn to alternatives, alongside expectations of a market supply surplus in 2027, he added.
Geopolitical uncertainty remains another factor for bullion.
The US-Iran conflict remains unresolved, with tensions escalating after President Donald Trump said Washington was considering joining Saudi strikes against Iran-backed Houthi rebels in neighbouring Yemen following an attack on Riyadh’s international airport.
Analysts said interplay of currency movements, US rate expectations, geopolitical developments and investment demand is likely to determine whether bullion sustains its recent recovery or remains confined to a range in the next week.
