Gold prices are projected to maintain their upward trajectory, although a period of consolidation is anticipated as investors await the outcome of the US Federal Reserve’s policy meeting scheduled for September 17. Market participants are also closely monitoring inflation data from major economies, including the UK and the Eurozone, alongside expected policy decisions from the Bank of England and the Bank of Japan, which may offer further insights for bullion prices.
Gold prices have shown a positive trend, closing higher for the fourth consecutive week. However, the momentum has slightly slowed, suggesting some consolidation during the mid-week period. Analysts highlight a notable price increase of over 10% in the past four weeks, which has left investors cautious about adding new long positions at the current elevated levels, as noted by Pranav Mer, Vice President of EBG – Commodity & Currency Research at JM Financial Services.
Geopolitical factors, including the ongoing tensions in the Middle East, the Russia-Ukraine conflict, and political transitions in Europe and Asia, are viewed as significant supportive elements for gold. On the Multi Commodity Exchange (MCX), gold futures for October delivery saw an increase of ₹1,616, or 1.5%. In international markets, Comex gold futures closed at $3,686.40 per ounce, briefly reaching $3,715.20 on September 9.
Market experts attribute the recent rally to various factors, including the implementation of a 50% tariff on Indian gold imports into the US and the exacerbating impacts of geopolitical conflicts, particularly the protracted Russia-Ukraine situation. According to Prathamesh Mallya from Angel One, the ongoing global uncertainties have contributed significantly to gold’s appeal as a safe-haven asset.
Research analyst Riya Singh from Emkay Global Financial Services remarked on the powerful rally of gold, which has reached record highs due to shifting macroeconomic conditions. She noted that gold has exceeded its inflation-adjusted peak from 1980, crossing the $3,700 mark, with a year-to-date gain exceeding 40%. Institutional demand, particularly from central banks in emerging markets, has provided stability to the market despite declines in jewelry sales in countries like India and China. Singh also indicated that maintaining levels above the current price could potentially lead to gold reaching $4,000 per ounce in the future.
Silver has also experienced a bullish trend, with Comex silver futures climbing 1.62% to $42.83 per ounce, achieving an intraday peak of $43.04. On the MCX, silver futures surged to a record high of ₹1,29,392 per kilogram. Singh commented on silver’s strong performance relative to gold, emphasizing its more pronounced reactions during favorable market conditions for precious metals. The metal marked its highest level since 2011 and recorded nearly a 40% year-to-date increase, bolstered by significant exchange-traded fund (ETF) inflows exceeding 1.13 billion ounces, valued over $40 billion.
While silver’s industrial applications in manufacturing and renewable energy provide long-term support, its pricing remains more volatile compared to gold. Singh indicated that a consistent upward trend could see silver reach $43 per ounce on Comex and between ₹1,35,000 to ₹1,38,000 per kilogram on MCX, provided the current momentum continues.
Analysts remain optimistic regarding the broader trajectory for precious metals, driven by ongoing central bank purchases, increased demand for safe-haven assets, and expectations of potential policy easing by global central banks.
