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Gold, Silver Face Volatility Amidst US Data & West Asia Tensions
27 Sep
Summary
- US economic data and geopolitical tensions are set to cause choppy spells for gold and silver.
- Analysts anticipate volatility due to upcoming US consumer confidence and inflation readings.
- The US jobs report will be crucial in determining Federal Reserve policy expectations.
Precious metals gold and silver are expected to navigate a turbulent week. Market participants are closely monitoring the US economic calendar, which features critical readings on consumer confidence, Gross Domestic Product (GDP), and Personal Consumption Expenditures (PCE) inflation. These figures, along with Eurozone inflation data and manufacturing Purchasing Managers' Indexes (PMIs), will significantly influence bullion sentiment.
Geopolitical developments continue to cast a shadow, with the US-Iran standoff remaining a key concern. Tensions were heightened following President Trump's rejection of Tehran's proposal regarding the Strait of Hormuz and nuclear talks. Additionally, speeches from Federal Reserve officials will provide further insights.
Analysts suggest that the upcoming US non-farm payrolls and unemployment data will be pivotal. These reports are expected to shape expectations about the Federal Reserve's October policy decision. Last week saw gold futures for October delivery fall by approximately 2.3%, settling at Rs 1.5 lakh per 10 grams on the MCX. Silver futures declined by 3%, closing at Rs 2.34 per kilogram.
Global markets mirrored this trend, with Comex gold futures for December delivery dropping 2.34% to USD 4,321.2 per ounce. Silver futures also ended the week with a loss. The pressure on gold is amplified by a rising dollar index and climbing US Treasury yields, which reached their highest levels since 2007. Higher long-term yields typically dampen demand for assets like gold and silver.
