Gold prices are anticipated to experience volatility in the coming week as investors monitor developments related to the U.S. government funding bill, labor market data, and commentary from the Federal Reserve, according to analysts.
The release of minutes from the Federal Open Market Committee (FOMC) meeting on Thursday is expected to impact sentiment in the bullion market. “While the upcoming week lacks significant data, high volatility is expected, with increased profit-booking followed by renewed buying. The focus will largely be on the U.S. funding bill vote and labor market data, should it be released,” stated Pranav Mer, Vice President of Commodity & Currency Research at JM Financial Services Ltd.
Mer noted that gold prices gained around 3.5-4 percent last week, driven by a weaker U.S. dollar and rising concerns over a potential partial government shutdown, which has delayed critical macroeconomic data. “Market participants are also considering the possibility of a Fed rate cut later this month,” he added.
On the Multi Commodity Exchange (MCX), gold futures for December delivery surged by ₹3,222, or 2.8 percent, in the past week, closing at ₹1,18,113 per 10 grams on Friday, just below the lifetime peak of ₹1,18,444 per 10 grams reached earlier in the week.
Jyoti Prakash, Managing Partner at AlphaaMoney, remarked that the recent rise in gold prices reflects its stability, achieving gains paired with modest drawdowns. “Increased exchange-traded fund (ETF) holdings, potential renewed central bank demand, and stronger speculative positions are driving this breakout. Gold prices have diverged from marginal production costs, with producer margins at their highest in 55 years,” he explained.
Echoing these sentiments, Prathamesh Mallya, DVP of Research at Angel One, pointed out that gold prices have reached historic highs in domestic markets. “Gold prices in India have risen sharply, appearing unstoppable,” he said, attributing this trend to the U.S. government shut down, anticipated Fed rate cuts, and the impacts of tariffs affecting various countries, including India.
Reflecting strong domestic demand, India’s gold and silver imports nearly doubled in September compared to August in anticipation of the festive and wedding season, according to analysts. Globally, gold futures for December delivery rose by 1.05 percent to settle at $3,908.90 per ounce on Friday, touching a record of $3,923.30 per ounce on Thursday.
Riya Singh, a Research Analyst at Emkay Global Financial Services, noted that gold extended its rally to a new all-time high last week, marking five consecutive days of gains and reaffirming its status as a safe haven amid political and monetary uncertainty in the U.S. “The inability of Washington to pass a government funding package has resulted in an ‘orderly shutdown’ for the first time in seven years, threatening delays in critical macroeconomic data and clouding the U.S. economic outlook, thereby putting pressure on the dollar,” she said.
Singh further indicated that “Gold’s year-to-date performance has been remarkable, with prices increasing more than 46 percent, representing the largest annual gain since 1979.” The surge has been fueled by significant inflows into gold-backed ETFs and heightened safe-haven demand amid concerns regarding Federal Reserve independence. Meanwhile, the dollar’s gains remain subdued in light of expectations of two additional Fed rate cuts, amidst geopolitical tensions in Europe, further enhancing gold’s allure.
Silver futures also experienced a strong rally last week, with the white metal for December delivery rising by ₹3,855, or 2.72 percent. It closed at ₹1,45,744 per kilogram on Friday, following an all-time high of ₹1,46,975 per kg. “Silver continues to outperform gold, maintaining its multi-month rallies. In September, both MCX and Comex futures recorded consecutive gains, with the white metal surging by 34 percent over five straight months,” said Pankaj Singh, an investment manager and founder at SmartWealth.ai.
On the global stage, Comex silver futures for December delivery increased by 3.44 percent to settle at $47.96 per ounce, reaching a peak of $48.32 per ounce on Friday. Singh noted that silver’s robust momentum is attributed to its dual role as both a monetary and industrial metal. “Strong demand for solar panels, electric vehicles, and electronics, compounded by ongoing supply deficits, is tightening markets,” he added.
Pranav Mer expects domestic silver prices to remain volatile but with an upward bias. “Silver continues to surpass gold, and positive momentum is likely to persist, potentially hitting near-term levels of ₹1,50,000-1,70,000 per kg.”
Looking ahead, analysts predict that gold will continue to benefit from safe-haven demand, a weaker U.S. dollar, and global geopolitical uncertainties. Intermittent profit-booking may introduce volatility but is unlikely to derail the prevailing uptrend.
