Gold and Silver Prices Break Downtrend as Fed Hike Expectations Surge
Gold and silver prices have broken their downtrend of several months, staging a sharp recovery in August. The anticipation of a US Federal Reserve interest rate hike played a key role in this surge, while the weakening of the US Dollar also contributed to the increase.
The Comex gold price rose by 9.73% in August, settling at $4,497.3 per ounce by month-end. Silver prices performed even better, gaining 16.32% to settle at $67.2 per ounce.
Local markets mirrored this global trend, with precious metal prices increasing in India as well. However, the Indian Rupee's strengthening against the US Dollar limited the gains in local markets. MCX Gold gained 7.75% to settle at ₹1,54,456 per 10 grams, while MCX Silver closed at ₹2,40,250 per kilogram, up 8.46%.
The short-term outlook for gold has turned positive, with a potential target of $4,750-$4,800. However, this optimism would be threatened if the price falls below the support level of $4,200-$4,220.