Gold May Stay Choppy Ahead of US Jobs Data, Fed Meeting Minutes: Analysts

Gold prices are likely to remain volatile in the coming week but may find support as focus shifts to key US economic data releases, including jobs report and the Federal Reserve's meeting minutes for fresh signals on the interest rate decision, analysts said.

Investors will also closely watch Federal Reserve Chair Jerome Powell's speech on Wednesday. Along with comments from other Fed officials throughout the week which will drive the gold prices, they added.

"The volatility is expected to remain high, but prices may find some support... Focus will be on the US economic data releases, which may give some clues on the health of the American economy & possible some direction on the Fed's rate outlook," Pranav Mer, Vice President, EBG - Commodity & Currency Research, JM Financial Services Ltd, said.

On a weekly basis, gold futures for December delivery climbed by ₹2,494, or 2.06% in the past week, on the Multi Commodity Exchange (MCX).

"The precious metal rallied earlier in the week amid uncertainty over the impact of the 43-day US government shutdown on the economy, delayed data releases and the recent increase in money supply by the US Federal Reserve.

"A weaker dollar also supported the gold up-move. Fed officials have signalled caution over further easing, citing worries about inflation," Mer said.

However, profit booking at elevated levels dragged gold lower on Friday. The yellow metal tumbled by ₹3,190, or 2.52%, to close at ₹1,23,561 per 10 grams on the MCX.

"Gold prices pared some of the gains on Friday to close the session down, weighed by hawkish commentary from some of the Fed officials and as traders trimmed bets for a December rate cut to near 40%," Pranav Mer added.

Prathamesh Mallya, DVP - Research, Non-Agri Commodities and Currencies, Angel One, said, "Markets hope fresh data would show a slowing economy, giving the Fed room to cut rates in December. A host of factors will keep gold prices volatile in the weeks ahead." The prolonged US shutdown, which ended on Thursday, created a major data gap, leaving the Fed and traders making them blind ahead of next month's policy meeting, he added.

Globally, Comex gold futures for December delivery rose by $84.4, or 2.10%, over the past week. However, the metal declined by $100.3, or 2.39%, to finish at $4,094.2 per ounce, on Friday.

"Gold extended its strong upward momentum, supported by renewed ETFs and softer US macro signals that reinforced expectations of further Federal Reserve easing," Riya Singh, Research Analyst, Commodities and Currency, Emkay Global Financial Services, said.

The exchange traded funds (ETFs) added 114,345 ounces in the last session, taking year-to-date purchases to 14 million ounces, a 17% increase in total ETF holdings to 97.3 million ounces, valued at nearly $480 million.

Singh said weak jobs data, a fragile fiscal outlook, and a soft dollar continued to attract safe-haven flows, pushing gold back above $4,200 per ounce.

She further added that the metal signalled further bullish momentum and a potential extension toward $4,300-4,385 an ounce.

"Despite some caution from some Fed officials the market remains firmly biased towards further easing, leaving the broader narrative decisively supportive of gold and positioning it for another strong weekly close," Singh said.

On the MCX, silver futures for December delivery skyrocketed by ₹8,290, or 5.61%, over the past week.

"Silver prices outperformed all the asset classes with a rally of more than 12% in four trading sessions till Thursday, as traders jumped on the metal after it was added to the US critical minerals list in the previous week," Pranav Mer of JM Financial Services Ltd, said.

On the MCX, the white metal tanked by ₹6,452, or 3.97% to settle at ₹1,56,018 per kilogram on Friday.

Comex silver futures for December delivery went up by $2.5, or 5.3% in the last week, in the overseas markets.

However, it had plummeted by $2.4, or 4.67% to end at $50.68 an ounce on Friday.

On the technical front, silver price momentum looks sideways with upside resistance at ₹1,70,500 per kilogram, he said.