Gold May Consolidate For Third Week As Traders Track US Data, Tariff Hearing
On the Multi Commodity Exchange, gold futures for December delivery dropped by Rs 2,219, or 1.8%, during the past week to settle at Rs 1,21,232 per 10 grams on Friday.
Gold prices are likely to see consolidation for the third straight week as traders focus on key macroeconomic indicators and policy developments, including the US Supreme Court's tariff hearing on Nov. 5, analysts said.
The focus will be on the manufacturing and services PMI data from key regions as well as China's trade and growth numbers.
In the US, private data, including ADP non-farm payroll, consumer sentiment and inflation expectations, will also be closely watched as they will steer the bullion prices in the near-term, they added.
"Also in focus will be the tariff hearing in the US Supreme Court on Nov. 5 and any decision, positive or negative, markets may see a significant reaction," Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said.
"Gold prices closed in negative for the second straight week, but volatility was at its extreme as a series of events such as the hawkish Fed outlook, and a positive outcome of the US-China trade talks were negative for prices, but the same were partly offset by safe-haven demand and reports of stronger investment demand predictions at the London Bullion Market Association (LBMA) week," Mer said.
A stronger dollar further capped gains. "The dollar index, which rose and closed above 99.5, following a series of trade deals signed by the US President Donald Trump with some South-Asian nations - that could be positive from the US economic perspective.
"Meanwhile, concerns lingered over the health of the American economy amid delayed data releases, as the government is expected to remain shut through November, also lent support to bullion prices," he noted.
On the Multi Commodity Exchange, gold futures for December delivery dropped by Rs 2,219, or 1.8%, during the past week to settle at Rs 1,21,232 per 10 grams on Friday.
"Gold prices corrected from the recent highs of Rs 1,29,000 per 10 gms to around Rs 1,21,000 per 10 grams as on Oct. 31, mainly due to easing tensions between US and India on the tariff as well as strengthening dollar index, which is at three-months high," Prathamesh Mallya, DVP - Research, Non - Agri Commodities and Currencies, Angel One, said.
He expects the weakness in the precious metal futures to continue for the third straight week. 'MCX gold futures might fall towards Rs 1,18,000 per 10 grams mark in the week ahead, with volatility likely to continue,' Mallya said.
Commodity markets will remain closed on Wednesday on account of Guru Nanak Dev Jayanti.
Pankaj Singh, Investment Manager on smallcase and Founder & Principal Researcher of SmartWealth.ai, said gold has entered a consolidation phase after a robust 10-month rally in India and globally.
"Despite short-term consolidation, persistent US growth headwinds, rising debt concerns, and political uncertainty continue to support long-term confidence in gold's role as a strategic reserve and store of value," he said.
In the international markets, Comex gold futures for December delivery fell by $141.3, or 3.41%, during the week to settle at $3,996.5 per ounce on Friday.
"Gold retreated this week as traders reassessed expectations of further US rate cuts and digested the limited progress from the US-China trade truce. Gold hovered around $4,000 an ounce, heading for its second straight weekly decline and down about 9% from its record high above $4,380 earlier this month," Riya Singh, Research Analyst, Commodities and Currency, Emkay Global Financial Services, said.
On the MCX, silver futures for December delivery snapped a nearly two-week losing streak, by rising Rs 817, or 0.55%, to close at Rs 1,48,287 per kilogram on Friday. Comex silver futures fell 0.87 per cent over the past week and marginally lower at $48.16 per ounce in the overseas trade on Friday.
"Silver's decline has been steeper, dropping nearly 14% from its peak, underscoring its reputation as gold's higher-beta counterpart. Despite the recent pullback, central-bank demand for gold remains robust, with purchases rising 28% in the third quarter, led by Kazakhstan and Brazil.
The World Gold Council expects full-year official buying to reach between 750-900 tonnes, as nations continue diversifying away from the US dollar," Singh said.
She added that gold retains strong structural support from central banks and long-term investors, while silver lacks similar institutional support, since it isn't recognised as a reserve asset by the IMF, leaving it more vulnerable to sentiment-driven swings.
On the technical front, Pranav Mer of JM Financial Services said bullion may consolidate in the coming week, with resistance for gold seen at Rs 1,23,000 per 10 grams and for silver at Rs 1,51,000 per kilogram. On the downside, key support for silver is pegged at Rs 1,43,500-1,38,000 per kilogram, indicating potential consolidation within a broad trading range in the coming sessions.
