Gold prices are anticipated to sustain their momentum in the upcoming week, bolstered by global monetary easing, festive demand in Asia, central bank purchases, and ongoing geopolitical uncertainties, according to analysts.
Market participants will be closely watching trade negotiations between the United States and India, as well as between Washington and Beijing. Additionally, key data regarding manufacturing and services PMI across various regions, along with vital U.S. economic indicators such as housing data, personal consumption expenditures, and consumer sentiment, will influence market trends.
Pranav Mer, Vice President of EBG – Commodity & Currency Research at JM Financial Services, stated, “The bullion is expected to remain supported by robust festive demand in Asia, while ETFs and central banks continue to be net buyers. Safe-haven buying is mixed at current elevated prices.”
On the Multi Commodity Exchange (MCX), gold futures for October delivery rose by ₹1,616, or 1.5 percent, last week, concluding at ₹1,09,900 per 10 grams on Friday. Mer noted that gold prices recovered from a mid-week decline and finished in the green as attention shifted to the U.S. economic calendar, especially inflation and employment figures.
Prathamesh Mallya, DVP – Research, Non-Agri Commodities and Currencies at Angel One, remarked that gold prices have been consolidating following a 25 basis point reduction in U.S. Federal Reserve interest rates, with indications of two more cuts to follow. “Gold prices slightly corrected post-announcement due to a rise in the dollar index. However, the trend remains clear with upward momentum,” he added.
Internationally, gold futures closed at $3,705.80 per ounce on Saturday after hitting an all-time high of $3,744 per ounce midweek. Manav Modi, Analyst – Precious Metal Research at Motilal Oswal Financial Services, explained that while gold initially faced some profit-taking after setting records, losses were limited due to weak U.S. job data and the depreciation of the rupee. Market sentiment was also shaped by higher-than-expected inflation figures, softer labor market data, and a significant decline in non-farm payrolls, prompting expectations of at least a 25 basis point cut.
Geopolitical tensions, particularly in the Middle East and Eastern Europe, have contributed a risk premium that supports safe-haven demand. Despite a brief nearly 1 percent retreat following the policy announcement, gold continues to hover near historic highs as investors assess Federal Reserve guidance and geopolitical events, Modi noted.
Riya Singh, Research Analyst at Emkay Global Financial Services, projected a medium-term upside for gold, with targets in the international market potentially reaching $3,850 to $4,000 per ounce, particularly if U.S. inflation continues to ease and the Fed proceeds with projected cuts.
In contrast, silver has outperformed gold in recent weeks, driven by investment inflows and industrial demand. On the MCX, silver futures closed at ₹1,30,096 per kilogram, while in global markets, the white metal rose nearly 2 percent to $42.95 per ounce on Saturday, previously reaching a high of $43.43 per ounce earlier in the week.
“Silver has exhibited a more aggressive growth trend than gold. Prices are nearing the $43 per ounce mark, marking the first sustained breach above $40 since 2011, reflecting both investment inflows and supply constraints,” Riya Singh observed. Industrial applications have become a significant growth driver for silver, with demand from solar panel manufacturing surging as global photovoltaic installations expand.
“Silver’s share of module costs has tripled in two years, creating concerns for solar manufacturers while tightening the physical market. Demand from electric vehicles, 5G infrastructure, and battery storage continues to grow at double-digit rates, countering weaker photographic and jewelry demand,” she added. On the supply side, stagnant mine production over the past five years, concentrated in a few locations, leaves the market vulnerable to disruptions.
Silver prices could potentially reach $49 to $50 per ounce in global markets in the near term, according to Singh. Pranav Mer, from JM Financial Services, echoed similar sentiments, estimating that silver prices in the domestic market could rise to ₹1,40,000 to ₹1,50,000 per kilogram.
As the U.S. Federal Reserve signals a softer policy stance and global demand factors strengthen amid the ongoing Asian festive season, the bullion markets are expected to persist in their upward trajectory in the weeks ahead. However, analysts warn that volatility may remain a factor due to the complex interplay of U.S. data releases, currency fluctuations, and geopolitical events.
