New Delhi: Gold prices declined nearly 2% this week as surging crude oil, stubborn US inflation and growing expectations of a Federal Reserve rate hike reduced investor appetite for precious metals.
On Friday, MCX gold futures for October slipped 0.08% to ₹1,52,655, while September silver futures declined 0.04% to ₹2,34,886 per kg.
According to India Bullion and Jewellers Association data, 24-carat gold stood at ₹1,51,938 per 10 grams on Friday, compared with ₹1,54,884 a week earlier.
Crude Oil Fuels Inflation Worries
Escalating US-Iran tensions and concerns over shipping routes pushed WTI crude above $104 per barrel. Oil gained around 9.6% over five sessions and nearly 16% over the past month.
The sharp increase has strengthened concerns that higher energy costs could keep inflation elevated and force the US Federal Reserve to maintain a tighter monetary policy.
Gold and silver consequently recorded their third consecutive weekly decline, although both precious metals recovered some ground on Friday.
US Inflation Keeps Fed in Focus
US headline inflation increased 0.4% month-on-month and 3.4% year-on-year in August, with energy costs contributing to the increase.
Producer inflation also accelerated to 5.4% annually, slightly above market expectations.
Following the data, expectations of a rate increase at the September 15-16 Federal Open Market Committee meeting climbed above 70%, according to market participants.
US Treasury yields also moved sharply higher. The 10-year yield touched 4.975% intraday, while the two-year yield approached 4.65%.
Gold Price Outlook
Analysts see Comex gold resistance at $4,500-$4,530, while support is placed around $4,340-$4,370.
For MCX gold, resistance is expected at ₹1,54,000-₹1,54,700, while the ₹1,50,000-₹1,50,700 range could provide immediate support.
Crude oil movements, US inflation and the upcoming Fed decision are likely to remain key triggers for bullion prices.
