Gold Rallies as Weakened Dollar and Lower Rate Hike Odds Spark Price Surge

Gold prices surged on a weekly basis as the US dollar weakened and weaker-than-expected US labor data cut the odds of further US Federal Reserve tightening.

The yellow metal jumped 4.73% in just five days, with gold futures (October) gaining 0.11% on Friday, while silver futures (September) advanced 0.15% on the Multi Commodity Exchange (MCX). The price of 10 grams of 24-carat gold stood at Rs 1,49,621 on Friday, up from Rs 1,42,863 seen on Monday.

The unexpected drop in US employment report, which showed an increase of just 23,000 jobs in July compared to forecasts for about 80,000, weighed heavily on market expectations for a September Fed rate hike. Analysts now predict only about 44% chance of a rate hike, down from 58%.

Treasury yields fell in response, with the benchmark 10-year yield easing to around 4.60% from an intraday high of 4.68%, creating a supportive backdrop for precious metals. The July US inflation report will be closely watched for fresh clues on the Federal Reserve's policy trajectory.