Gold rate today: The precious metal prices ended the week on a constructive note, with precious metals posting strong gains after weaker-than-expected US jobs data reduced hopes of a US Fed rate hike. Gold and silver rates benefited from declining US Treasury yields and a softer US dollar, while crude oil remained volatile amid shifting headlines surrounding a potential agreement to reopen shipping through the Strait of Hormuz.
Overall, gold and silver prices were driven by evolving expectations for US monetary policy, economic data, movements in the dollar and Treasury yields, and geopolitical developments in the Middle East.
Gold rate today: What’s fueling gold prices?
On the triggers fueling the gold price today, Ponmudi R, CEO at Enrich Money, said that gold and silver consequently emerged as the strongest-performing commodities of the week. Gold, which had started the week under pressure as geopolitical risk premiums eased following the postponement of a planned US strike on Iran, staged a sharp reversal after the employment report, climbing to a seven-week high and posting a weekly gain of more than 8%. Silver followed a similar trajectory, retreating early in the week before rallying to a six-week high by Friday as lower Treasury yields and a weaker dollar improved the appeal of non-yielding assets.
“Despite the shift in rate expectations, inflation remains a key risk, suggesting that the outcome of the next US Fed meeting will continue to depend on upcoming inflation and labour-market data,” Ponmudi said.
Soft US job data
The week’s key macroeconomic catalyst was Friday’s U.S. employment report, which showed the economy unexpectedly lost 23,000 jobs in July, compared with expectations for an increase of about 80,000—the first monthly decline in payrolls in five months. Earlier payroll data were also revised sharply lower, with revisions to the previous two months wiping out roughly 103,000 jobs.
The weak report followed softer-than-expected ADP private payrolls data, which showed 44,000 jobs added versus expectations of 75,000, and a contraction in the ISM Services Employment Index earlier in the week, both of which had already pointed to a cooling labour market.
Strait of Hormuz news
A US official stated on Friday that progress has been made in talks between Iran and Oman, which could lead to the reopening of the strategic Strait of Hormuz and the restoration of oil exports disrupted by the five-month-old conflict.
Reuters, citing a US official speaking on the condition of anonymity, noted that Washington expects an agreement between Iran and Oman, the two nations bordering the waterway, to be reached shortly, allowing standard commercial oil shipments to resume. Securing a deal over control of the strategic passage is considered a key stepping stone toward a broader peace agreement.
“Cooling crude oil prices are putting pressure on the US treasury yields and the US Dollar, as a smooth supply of crude oil prices is expected to contain inflation, and hence the US Fed rate hike looks unlikely in such a scenario,” said Anuj Gupta, a SEBI-registered market expert.
US dollar, treasury yield under pressure
Although the unemployment rate edged down to 4.1%, largely due to lower labour force participation, the broader employment data prompted investors to scale back expectations of another near-term Federal Reserve rate hike. Markets reduced the probability of a September rate increase to around 44% from roughly 58% before the report.
Treasury yields fell in response, with the benchmark 10-year yield easing to around 4.60% from an intraday high of 4.68%, while the U.S. dollar weakened sharply, creating a supportive backdrop for precious metals.
Is it the right time to buy gold?
Speaking on the outlook og gold prices, Ponmudi R of Enrich Money said, “Gold prices are likely to remain highly sensitive to US inflation data, Federal Reserve communication, Treasury yields, the US dollar, and developments surrounding the Strait of Hormuz. The weaker US labour-market data has strengthened the near-term fundamental backdrop for gold and silver, and any further decline in Treasury yields or the dollar could provide additional support for bullion.”
Gold rate today: Important supports and targets
Advising a buy-on-dips strategy for gold investors, Anuj Gupta said, “Overall, the outlook for gold rates today looks positive, and any dip should be seen as a bottom-fishing opportunity. Gold price today is facing a hurdle at ₹1,52,000, with immediate support at ₹1,49,400 and ₹1,47,000. In the international market, COMEX gold rate has support placed at $4,350, and the yellow metal is facing resistance at $4,450 per ounce.”
Ponmudi R of Enrich Money said that MCX Gold October Futures ended this week on a positive note near the Rs1,52,000, breaking out above its 20-week EMA and reclaiming key resistance in the process. The weekly RSI has firmed to 56.24, while the daily RSI has surged to 66.86, confirming strong bullish momentum on both timeframes.
“Immediate resistance is placed at ₹1,52,200– ₹1,52,800, followed by the next resistance zone at ₹1,54,100– ₹1,54,800; a sustained close above ₹1,54,800 would open the path toward fresh highs. On the downside, immediate support lies at ₹1,50,000– ₹1,50,700, with the next support at ₹1,48,000– ₹1,48,600; a break below ₹1,48,000 would stall the current breakout,” said Ponmudi of Enrich Money.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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