Gold Prices Set to Rise Amid West Asia Tensions, Fed Minutes

Market analysts predict that gold and silver prices will remain positive next week, despite expected elevated volatility. The analysts point to ongoing developments in West Asia and key global economic data as drivers of bullion prices.

The US housing and trade data, inflation figures from the UK, Eurozone, and Japan, as well as China's economic indicators, will be closely watched for cues on industrial metals. The Federal Reserve's FOMC meeting minutes are also expected to provide signals on the US Central bank's monetary policy outlook.

Pranav Mer, Senior Vice President of EBG - Commodity & Currency Research at JM Financial Services Ltd, expects gold and silver prices to move up towards Rs 1.57 lakh per 10 grams and Rs 2.54 lakh per kg level. Gold futures for October delivery on the Multi Commodity Exchange (MCX) climbed Rs 2,686, or nearly 2%, last week to close at Rs 1.54 lakh per 10 grams.

On the international markets, Comex gold futures for December delivery rose $37.6, or nearly 1%, last week to $4,437.3 per ounce, while silver went up $1.61, or 2.5%, to $65.11 an ounce in New York.

Bullion prices found support due to reduced bets on a September rate hike by the US Fed following weaker-than-expected non-farm payroll data and steady inflation. Safe-haven demand also supported gold amid the West Asia conflict and US-Iran tensions over the Strait of Hormuz, with no resolution in sight.

Jateen Trivedi, VP Research Analyst at LKP Securities, notes that the US dollar, interest-rate expectations, and geopolitical developments will remain key drivers for bullion prices. Gold traded higher this week, gaining 1%, while the rally extended more than 2% before profit-booking emerged at higher levels.