- Gold and silver face volatility amid US economic data and West Asia tensions
- Key US reports include consumer confidence, GDP, and inflation indexes
- US non-farm payrolls report will influence Federal Reserve policy expectations
Gold and silver are set for another volatile week as investors assess fresh US economic data, shifting expectations for Federal Reserve policy and escalating tensions in West Asia.
Investors will turn their attention to a slate of key US data in the holiday-shortened trading week, including consumer confidence, third-quarter GDP and the Federal Reserve's preferred measure of inflation, the Personal Consumption Expenditures index.
Eurozone inflation data, manufacturing purchasing managers' indexes and comments from Federal Reserve officials are also expected to influence market sentiment.
The US non-farm payrolls report will be closely watched for clues on the central bank's next policy move.
A stronger-than-expected labour market reading could reinforce expectations of tighter monetary policy and weigh on precious metals, while softer employment data could ease those concerns and provide support to bullion.
Geopolitical developments will remain another important driver. Tensions between the US and Iran have added uncertainty to global markets after US President Donald Trump said he had rejected Tehran's proposal to reopen the Strait of Hormuz within a week and resume nuclear negotiations in exchange for lifting the naval blockade.
"The broader outlook remains cautious as volatility is likely to stay elevated. The market will closely focus on the upcoming US non-farm payrolls and unemployment data, which will be crucial in determining expectations around the Federal Reserve's October policy decision," Jateen Trivedi, vice president, research analyst-commodity and currency at LKP Securities, said.
On the Multi Commodity Exchange, gold futures for October delivery fell Rs 3,500, or about 2.3%, last week to settle at Rs 1.5 lakh per 10 grams. Silver futures declined Rs 6,907, or 3%, to Rs 2.34 lakh per kilogram.
Trivedi said gold remained under pressure as profit booking at elevated levels continued, with prices moving in the Rs 1.5 lakh-1.54 lakh range during the week.
A sustained rise in the dollar index above 101 could add to the pressure, as a stronger US currency generally makes dollar-denominated bullion more expensive for overseas buyers.
In international markets, Comex gold futures for December delivery fell $103.70, or 2.34%, last week to $4,321.20 an ounce. Silver declined $2.35, or 3.5 per cent, to $64.80 an ounce.
"Gold futures traded in a range for most trading sessions last week but remained under selling pressure, with international prices closing around $4,300 per ounce," Pranav Mer, senior vice president, EBG-commodity and currency research at JM Financial Services, said.
Higher US Treasury yields are also weighing on bullion. The 10-year yield has climbed to its highest level since 2007, while the 30-year yield is near levels last seen in 2004, reducing the appeal of non-yielding assets such as gold and silver.
Crude oil movements could add another layer of volatility. While attacks on energy infrastructure by Russia and Ukraine continue, increased supplies from Saudi Arabia and Iraq have improved availability and weighed on oil prices, Mer said.
(With PTI inputs)
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.