Gold and silver prices in India jumped on the Multi Commodity Exchange (MCX) on Monday, following gains in international bullion prices, as investors watch looked to US inflation data for fresh clues on the Federal Reserve's interest rate trajectory.
MCX gold rate for October futures contracts traded higher by Rs 865, or 0.57%, at Rs 1,52,685 per 10 grams level. MCX silver price for September futures contracts traded higher by Rs 3,174, or 1.37%, at Rs 2,34,640 per kg.
In the international market, gold prices were steady after prices hit a seven-week high in the previous session.
Spot gold price was flat at $4,346.85 per ounce, while US gold futures rose 0.2% to $4,406.80 an ounce. Spot silver price gained 0.9% to $64.09 per ounce.
Weak US jobs data sparked a rally in gold and silver prices as fears of an imminent Fed rate hike in the September policy diminished. Data showed the US economy unexpectedly shed jobs in July and previously reported job gains for the prior two months were revised sharply lower.
“A weak US dollar amid disappointing non-farm payrolls data is supporting gold prices. The probability of a September rate hike by the US Fed is low, further boosting the demand for the safe-haven metal,” said Jigar Trivedi, Senior Research Analyst at IndusInd Securities.
Market participants will now watch out for the US inflation data, as it could influence expectations around interest rates and, consequently, the direction of precious metals.
Futures markets flipped the odds of a rate hike at the September 15-16 Federal Open Market Committee meeting from likelier-than-not to a worse-than-even chance, Reuters reported.
A lower interest rate environment boosts the attractiveness of non interest-yielding gold against income-generating assets.
“From a bullion industry perspective, we continue to see strong investor interest, and believe any short-term movements should be viewed in the context of the broader positive trend in gold,” said Darshan Desai, CEO, Aspect Bullion & Refinery.
Gold Price Outlook
According to Jigar Trivedi, the outlook for MCX gold price remains positive, with support seen at Rs 1,52,000 level and resistance placed at Rs 1,54,000 level.
Silver Price Outlook
The outlook for MCX silver prices remains positive. The white metal may find support at Rs 2,33,500 level and resistance at Rs 2,36,500 level, Trivedi added.
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