Gold outlook: Bullion seen staying strong ahead of crucial Fed cues
Gold is expected to remain firm in the coming week as markets prepare for a fresh round of economic data from the United States and other major economies that could offer further direction on the US Federal Reserve's interest rate trajectory.
Among the key indicators on investors' radar are US services PMI, trade data and weekly jobless claims. Inflation data from the Eurozone, China, Japan and Germany will also be tracked closely. Analysts said that any fresh geopolitical developments or fluctuations in crude oil prices could trigger volatility in precious metals.
"Gold prices are likely to see support in both domestic and international markets," Pranav Mer, sr vice president, EBG - commodity & currency research, JM Financial Services Ltd, said.
The optimism follows a strong week for bullion, with gold futures for August delivery on the Multi Commodity Exchange (MCX) recovering after four straight weeks of decline. The contract rose Rs 3,216, or 2.2%, to end the week at around Rs 1.47 lakh per 10 grams.
Silver outperformed gold during the week. The September futures contract on the MCX gained Rs 13,938, or 6.2%, to settle at Rs 2.37 lakh per kilogram.
Internationally, Comex gold futures climbed $91, or 2.2%, over the week to settle at $4,187.30 per ounce, while silver rose $3.14, or 5.3%, to $62.81 per ounce.
Mer said gold recovered from an early dip and closed the week in positive after multiple failed attempts to sustain below $4,000 per ounce in the international market. Renewed tensions between Russia and Ukraine also supported bullion demand.
According to the World Gold Council, central banks added a net of 41 tonnes of gold to their reserves in May.
"Gold recovered this week on a weaker US dollar and short covering from oversold levels helped bullion prices rebound after nearly a month of sustained weakness," said Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities.
He added that easing inflationary pressures, relatively stable crude oil prices and comments from the Federal Reserve Chair Kevin Warsh have prompted markets to reassess the outlook for US interest rates.
Among the key indicators on investors' radar are US services PMI, trade data and weekly jobless claims. Inflation data from the Eurozone, China, Japan and Germany will also be tracked closely. Analysts said that any fresh geopolitical developments or fluctuations in crude oil prices could trigger volatility in precious metals.
"Gold prices are likely to see support in both domestic and international markets," Pranav Mer, sr vice president, EBG - commodity & currency research, JM Financial Services Ltd, said.
The optimism follows a strong week for bullion, with gold futures for August delivery on the Multi Commodity Exchange (MCX) recovering after four straight weeks of decline. The contract rose Rs 3,216, or 2.2%, to end the week at around Rs 1.47 lakh per 10 grams.
Silver outperformed gold during the week. The September futures contract on the MCX gained Rs 13,938, or 6.2%, to settle at Rs 2.37 lakh per kilogram.
Internationally, Comex gold futures climbed $91, or 2.2%, over the week to settle at $4,187.30 per ounce, while silver rose $3.14, or 5.3%, to $62.81 per ounce.
Mer said gold recovered from an early dip and closed the week in positive after multiple failed attempts to sustain below $4,000 per ounce in the international market. Renewed tensions between Russia and Ukraine also supported bullion demand.
According to the World Gold Council, central banks added a net of 41 tonnes of gold to their reserves in May.
"Gold recovered this week on a weaker US dollar and short covering from oversold levels helped bullion prices rebound after nearly a month of sustained weakness," said Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities.
He added that easing inflationary pressures, relatively stable crude oil prices and comments from the Federal Reserve Chair Kevin Warsh have prompted markets to reassess the outlook for US interest rates.
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