Gold Prices to Remain Firm as Investors Await Fresh Fed Cues, Inflation Data: Analysts

New Delhi, July 6: Gold prices are expected to remain firm this week as investors track key economic data from the US and other major economies for further clues on the Federal Reserve’s interest rate trajectory.

Traders will closely watch US services PMI, trade data and weekly jobless claims, along with inflation figures from the Eurozone, China, Japan and Germany.

Any fresh geopolitical developments or movement in crude oil prices could increase volatility in precious metals, they added.

“Gold prices are likely to see support in both domestic and international markets,” Pranav Mer, Sr. Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd, said.

Gold futures for August delivery on the Multi Commodity Exchange (MCX) rebounded after four consecutive weeks of losses, rising by Rs 3,216, or 2.2 per cent, during the week to close at around Rs 1.47 lakh per 10 grams.

Also Read: How to Invest in Gold for Beginners: Simple Start Guide 

Silver futures for the September contract gained Rs 13,938, or 6.2 per cent, to end at Rs 2.37 lakh per kilogram on the MCX.

“Gold recovered this week on a weaker US dollar and short covering from oversold levels helped bullion prices rebound after nearly a month of sustained weakness,” said Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities.

He added that easing inflationary pressures, relatively stable crude oil prices and comments from the Federal Reserve Chair Kevin Warsh have prompted markets to reassess the outlook for US interest rates.

In the international market, Comex gold futures rose USD 91, or 2.2 per cent, during the last week to settle at USD 4,187.30 per ounce, while silver gained USD 3.14, or 5.3 per cent, to USD 62.81 per ounce.

Mer said gold recovered from an early dip and closed the week in positive after multiple failed attempts to sustain below USD 4,000 per ounce in the international market. Renewed tensions between Russia and Ukraine also supported bullion demand.

According to the World Gold Council, central banks added a net of 41 tonnes of gold to their reserves in May.

Trivedi said gold has stabilised after finding support near recent lows, but will remain highly sensitive to movements in the US dollar, Treasury bond yields, and upcoming macroeconomic data.

Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said the Federal Open Market Committee (FOMC) meeting minutes on July 8 will be scrutinised for how divided officials are on the hike debate flagged in June’s dot plot.

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)