Gold Prices Dipped by Nearly 3% on Weekly Basis Amid Rising Inflation Concerns

Gold prices in India dipped nearly 3% on a weekly basis due to rising inflation concerns and expectations of a US Federal Reserve rate hike. On Friday, MCX gold futures (October) edged up 0.03%, while MCX silver futures (September) dropped 0.07%. The price of 10 grams of 24-carat gold stood at Rs 1,54,884 on Friday, down from Rs 1,59,578 seen last Friday.

The price drop was attributed to the escalation in the US-Iran conflict, which surged crude oil prices and heightened inflation concerns. This led to a stronger dollar and rising Treasury yields, outweighing safe-haven demand for precious metals. The market mood shifted again during the week after weaker-than-expected US labour-market data and dovish Federal Reserve commentary revived expectations of a less aggressive monetary-policy stance.

However, the rebound was short-lived after Friday's August US employment report significantly exceeded expectations, pushing Treasury yields and the US dollar sharply higher. Analysts expect immediate resistance at $4,500-$4,530 zone for Comex Gold and Rs 1,56,500-Rs 1,57,000 zone for MCX gold.