Gold and silver prices are likely to remain volatile next week, with the US Federal Reserve’s interest rate decision, crude oil movements, the US dollar, and developments in the US-Iran conflict as key drivers of market sentiment, analysts said.
The September 15-16 meeting of the Federal Open Market Committee (FOMC) will be the key global event for bullion markets. The Fed policy and Chair Kevin Warsh’s commentary are likely to set the tone for precious metals.
Commodity markets will remain closed for the morning session on Monday due to Ganesh Chaturthi.
“Going ahead, gold will remain highly sensitive to Fed commentary, crude oil movements, the US dollar, inflation expectations and geopolitical developments,” Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said.
Any moderation in crude prices or a less hawkish stance by the US Federal Reserve could support a recovery in gold, while renewed strength in crude oil or a hawkish policy signal may trigger fresh selling, he said.
Gold, silver last week
The domestic market showed a mixed trend last week, with gold futures for October delivery edging up ₹17 to ₹1,52,784 per 10 grams on the Multi Commodity Exchange, while silver fell ₹2,684, or 1.13 per cent, to settle at ₹2.34 lakh per kilogram.
The global market, however, remained under pressure, with Comex gold futures for December delivery falling 1.5 per cent to $4,408.9 per ounce and silver declining 2.34 per cent to $65.19 per ounce.
“Gold futures moved between gains and losses throughout last week, but overall remained under selling pressure and closed the week in negative territory by 1.5 per cent,” Pranav Mer, Senior Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd, said.
The downside in the domestic market, however, was capped by a sharp fall in the rupee, he said.
Investors will also track monetary policy decisions from the Bank of England and Bank of Japan following the Fed, with all three central banks expected to raise interest rates by 25 basis points, Mer said.
The focus will also remain on inflation data from India, Germany, the UK, the eurozone, the US and Japan, while China’s investment and factory activity data will be important for industrial metals, he said.
Meanwhile, crude oil prices ended the week above $100 a barrel amid escalating hostilities in West Asia, adding another key variable for bullion markets.
Trivedi said the outlook for gold and silver remains volatile and data-driven, with the Fed decision likely to provide the next major directional trigger.