New Delhi, Oct 5: Gold prices are expected to remain volatile in the coming week, driven by developments around the US government funding bill, labour market data, and key Federal Reserve commentary, including Fed Chair Jerome Powell’s speech and the release of FOMC meeting minutes on Thursday, analysts said.
Pranav Mer, Vice President at JM Financial Services, noted that while the data calendar is relatively light, volatility will remain high due to profit-booking and renewed buying.
He said gold prices rose 3.5–4% last week, supported by a weakening US dollar and concerns over a partial US government shutdown, which has already delayed critical macroeconomic data.
Market participants are also pricing in the possibility of a potential Fed rate cut later this month.
On the MCX, gold futures for December delivery surged ₹3,222 or 2.8% last week, closing at ₹1,18,113 per 10 grams on Friday—just below the all-time high of ₹1,18,444.
Jyoti Prakash, Managing Partner at AlphaaMoney, attributed the recent rally to rising ETF holdings, central bank demand, and strong speculative positions.
He noted that gold’s appeal lies in its steady gains with minimal drawdowns.
Producer margins are also at a 55-year high, as prices have disconnected from marginal production costs.
Echoing similar views, Angel One’s Prathamesh Mallya highlighted that gold prices have reached record highs in India, driven by US shutdown fears, rate cut expectations, and global tariffs.
Festive and wedding season demand is also fueling domestic buying, as India’s gold and silver imports nearly doubled in September.
Internationally, gold futures for December delivery rose 1.05% to USD 3,908.90 per ounce on Friday, after hitting a record high of USD 3,923.30 on Thursday.
Riya Singh, Analyst at Emkay Global, said gold’s five-day rally reaffirms its role as a safe haven amid US political and monetary uncertainty.
The recent shutdown—the first in seven years—has clouded visibility on the US economic outlook, threatening further delays to macroeconomic data like the non-farm payrolls report.
Singh said gold has risen over 46% year-to-date, its best annual gain since 1979, driven by inflows into gold-backed ETFs and geopolitical tensions.
Expectations of more Fed rate cuts are also capping the dollar’s strength, keeping gold attractive.
Silver also rallied strongly, outperforming gold. MCX silver futures for December delivery jumped ₹3,855 (2.72%) to ₹1,45,744 per kg on Friday, after hitting an all-time high of ₹1,46,975.
On Comex, silver rose 3.44% to USD 47.96 per ounce, reaching a lifetime high of USD 48.32.
Pankaj Singh of SmartWealth.ai said silver’s superior performance is backed by its dual role as an investment and industrial metal.
Demand from solar, EVs, and electronics, along with supply deficits, is keeping the market tight.
Mer expects domestic silver prices to remain volatile with an upside bias, projecting near-term levels between ₹1,50,000 and ₹1,70,000 per kg.
Analysts agree that safe-haven demand, a weaker dollar, and geopolitical risks will continue to support gold prices, while intermittent profit-booking could bring volatility without disrupting the broader uptrend. (PTI)
