Volatile Gold Prices Ahead as US Data and Middle East Tensions Bite

Gold and silver prices are expected to remain volatile as market participants focus on US data releases, West Asia tensions, and their impact on crude oil prices. Analysts predict that the upcoming US non-farm payrolls report will be crucial in determining expectations around the Federal Reserve's October policy decision.

Jateen Trivedi, VP Research Analyst at LKP Securities, stated that 'the broader outlook remains cautious with volatility likely to stay elevated' due to these factors. He also noted that a sustained rise in the dollar index above 101 could add pressure on gold prices as a stronger dollar reduces demand for dollar-denominated bullion.

On the Multi Commodity Exchange (MCX), gold futures for October delivery fell Rs 3,500, or nearly 2.3 per cent, last week to settle at Rs 1.5 lakh per 10 grams. Silver futures declined Rs 6,907, or 3 per cent, to Rs 2.34 per kilogram.

Pranav Mer, Senior Vice President of EBG - Commodity & Currency Research at JM Financial Services Ltd., added that 'the pressure is not coming from currencies alone' as US 10-year Treasury yields have climbed to their highest since 2007, while 30-year yields are near 2004 highs. This trend tends to dent demand for assets such as gold and silver.