- Gold and silver prices likely volatile due to Fed decision, crude oil, US dollar, and US-Iran tensions
- Fed's September 15-16 meeting seen as key event shaping bullion markets and precious metals trends
- Domestic gold futures rose slightly; silver and global gold futures declined amid mixed market trends
Gold and silver prices are likely to remain volatile this week, with the US Federal Reserve's interest rate decision, crude oil movements, the US dollar and developments in the US-Iran conflict serving as key drivers of market sentiment, according to analysts.
The September 15-16 meeting of the Federal Open Market Committee will be the key global event for bullion markets, with the Fed's policy stance and commentary from Chair Kevin Warsh likely to set the tone for precious metals. Commodity markets will remain closed for the morning session on Monday due to Ganesh Chaturthi.
Fed Commentary To Drive Near-Term Direction
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"Going ahead, gold will remain highly sensitive to Fed commentary, crude oil movements, the US dollar, inflation expectations and geopolitical developments," said Jateen Trivedi, research analyst - commodity and currency at LKP Securities.
He added that any moderation in crude prices or a less hawkish stance from the Fed could support a recovery in gold, while renewed strength in crude oil or a hawkish policy signal may trigger fresh selling.
Domestic, Global Markets Show Mixed Trends
The domestic market showed a mixed trend last week, with gold futures for October delivery edging up Rs 17 to Rs 1,52,784 per 10 grams on the Multi Commodity Exchange, while silver fell Rs 2,684, or 1.13%, to settle at Rs 2.34 lakh per kilogram.
The global market remained under pressure, with Comex gold futures for December delivery falling 1.5% to $4,408.9 per ounce, and silver declining 2.34% to $65.19 per ounce.
"Gold futures moved between gains and losses throughout last week, but overall remained under selling pressure and closed the week in negative territory by 1.5%," said Pranav Mer, senior vice president, EBG - commodity & currency research at JM Financial Services Ltd. He added that the downside in the domestic market was capped by a sharp fall in the rupee.
BoE, BoJ Decisions, Inflation Data Also In Focus
Mer said investors will also track monetary policy decisions from the Bank of England and Bank of Japan following the Fed, with all three central banks expected to raise interest rates by 25 basis points. He added that focus will also remain on inflation data from India, Germany, the UK, the eurozone, the US and Japan, while China's investment and factory activity data will be important for industrial metals.
Meanwhile, crude oil prices ended the week above $100 a barrel amid escalating hostilities in West Asia, adding another key variable for bullion markets. Trivedi said the outlook for gold and silver remains volatile and data-driven, with the Fed decision likely to provide the next major directional trigger.
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