Gold Prices Decline Amid Rate Hike Expectations, Oil Surges on Middle East Tensions
Gold prices declined last week due to increased expectations of a Federal Reserve rate hike in September. The stronger-than-expected US jobs report boosted the dollar, putting pressure on gold. According to the CME FedWatch tool, the probability of a 25bps interest rate hike by the FOMC on September 16th rose to around 58%.
Silver prices also fell due to the strengthening dollar and tighter monetary policy expectations. The US nonfarm payrolls increased by 162,000 in August, surpassing market expectations for a 56,000 gain. The unemployment rate remained at 4.1%, while annual wage growth eased to 3.1%.
Crude oil prices surged over 9% last week due to the ongoing conflict in the Middle East. Iran and the US exchanged missile strikes, and Israel's defense minister threatened attacks on Iranian energy facilities. Copper futures held recent gains as supply-side challenges continued, with analysts pointing to Congo's export ban, weaker output from major producers Chile and Peru, and weather-related disruptions.
Axis Securities recommends selling MCX Gold below Rs 1,49,000, buying MCX Crude Oil above Rs 8,800, and buying MCX Copper above Rs 1,410.