Gold-Silver Prices Weekly Outlook: 24K/10 Grams Yellow Metal May Range From Rs 69K-72K; Silver Seen At Rs 85K

Gold prices rebounded previous losses during the trading week from August 12th to 16th, amidst rising tension in Middle East and expectations of early rate cut from US Fed and the quantum of the cut. At MCX, currently 10 grams of gold futures is near Rs 71,400, and silver futures is a little over Rs 83,250. The prices in gold and silver is expected to rise in the trading week from August 19th to 23rd.

After market hours on August 16th, MCX gold futures with expiry of October 4, 2024, ended at Rs 71,395 per 10 grams, rising by a whopping Rs 1,259 or 1.80%. While MCX silver futures with expiry of September 2024, jumped marginally by Rs 43 or 0.05% to Rs 83,256 per 1 kg.

Talking about last week's gold and silver performance, SMC Global Securities in its WISE Money report said, "On the commodity market front, the CRB experienced a marginal upside, driven by a fall in the dollar index that led to a surge in some commodities. U.S. Treasury yields also declined, while the INR depreciated to a record level of 84.16, adding momentum to the bullion market. Despite gold prices dropping after reaching a record high the previous week and closing near $2400, the bullion market saw significant activity. Silver experienced a sharper fall than gold, with gold and silver breaching the marks of 69000 and 79000, respectively."

Meanwhile, in the retail stores of India, 24K gold price in 10 grams is at Rs 72,770, while 22K and 18K is at Rs 66,700 and Rs 54,570 per 10 grams. Further, 1 kg silver at the stores is at Rs 86,000, while the cheapest silver is at Rs 86 as of August 18.

SMC's note said, "Gold prices posted a weekly gain after a decline the previous week, as the metal continued to benefit from its safe-haven status amid rising tensions in the Middle East. Concerns about a potential Iranian retaliatory strike against Israel have bolstered demand for gold. At the same time, strong U.S. economic data has led to expectations of a less aggressive stance by the Federal Reserve regarding its anticipated rate cut in September."

Also, the brokerage pointed out that retail sales unexpectedly surged in July, indicating robust consumer spending, while initial jobless claims fell to their lowest level in a month, easing concerns about a weakening labor market. This shift in economic outlook has led investors to bet on a 25 basis points rate cut by the Fed in September, moving away from the earlier expectation of a 50 basis points cut.

Moreover, it added that the reduced momentum for gold is tied to its relationship with interest-bearing assets. The U.S. Census Bureau reported that retail sales in July rose by 1% from June, well above the expected 0.3% increase, and rebounding from a 0.2% drop the previous month. This data suggests that the U.S. economy remains strong, even as consumer prices fell to a three-year low last month, reinforcing expectations that the Federal Reserve is ready to begin cutting interest rates.

Treasury yields also moved sharply higher, which is bearish for gold since it offers no interest, it said.

Looking ahead, in the upcoming trading week, SMC 's note said, "On Comex, gold prices are trading near 2,460, with potential resistance near 2,520 and support around 2,390. A break on either side will determine the next direction for gold. Silver may trade between 26.50 and 29.30. On MCX, gold prices may range between 69,000 and 72,000, while silver may trade between 78,000 and 85,500."