Spot gold was around $4,461.40 an ounce, up marginally from the previous close of $4,448 an ounce. Silver was trading at $68.11 an ounce, down 0.78%. Gold had risen more than 1% in the previous session as a softer dollar and heightened geopolitical tensions supported demand for the safe-haven asset.
The latest move in precious metals comes against a mixed global backdrop. Brent crude rose to around $101.4 a barrel on Thursday (September 10) after crossing the $100 mark a day earlier, raising concerns that higher energy prices could keep inflation elevated.
Why gold prices are moving today
Gold is getting support from a weaker dollar and renewed geopolitical tensions in the West Asia. However, the rise in crude oil prices is creating a counterforce by increasing concerns about inflation and potentially keeping US interest rates higher for longer.
According to Vedika Narvekar, Research Analyst – Commodities & Currencies, Anand Rathi Share and Stock Brokers, the market is now looking towards Friday’s (Septrember 11’s) US consumer inflation data. A softer-than-expected reading could reduce expectations of tighter monetary policy and provide further support to gold, while a stronger print could push yields higher and weigh on the metal.
She expects gold to remain in the $4,300-$4,500 an ounce range in the near term, with a sustained move above $4,500 an ounce potentially opening the way for further gains.
Investors are also awaiting US Producer Price Index data on Thursday (September 10). The readings will be closely watched ahead of the Federal Reserve’s September 15-16 meeting.
Markets are currently pricing around a 60% probability of a 25-basis-point rate hike at the September meeting, according to CME FedWatch.
Higher interest rates and bond yields can weigh on gold because the metal does not generate interest income. At the same time, a softer dollar makes gold cheaper for buyers holding other currencies.
Prithviraj Kothari, Managing Director, RiddiSiddhi Bullions Ltd., President, India Bullion and Jewellers Association and Chairman, Jain International Trade Organisation, said gold and silver were trading steady as a soft dollar and escalating US-Iran tensions kept markets on edge ahead of the inflation data.
What is happening with silver
Silver has been more volatile than gold in recent sessions. It gained sharply on Wednesday, rising about 3.3% in spot markets, before easing on Thursday (September 10).
Silver’s dual role as both an investment asset and an industrial metal makes it sensitive to changes in both investor sentiment and expectations for global economic activity.
Kothari said silver could test $70 an ounce if it manages to hold above the $67 level.
In India, Vikram Subburaj, CEO, Giottus.com, said the domestic market was also showing signs of consolidation.
He noted that the rupee, trading around ₹94.8 to the US dollar, remains an important factor for Indian bullion prices. A weaker rupee can support domestic gold and silver prices even if international bullion prices come under pressure.
Where could gold and silver prices go?
Technical levels suggest a relatively broad trading range in the near term.
Ashish Rajodiya, Head of Commodity at PL Capital Group, sees support for MCX gold at ₹1.49 lakh-₹1.47 lakh per 10 grams, with resistance at ₹1.55 lakh-₹1.57 lakh per 10 grams. For silver, he sees support at ₹2.31 lakh-₹2.27 lakh per 10 grams and resistance at ₹2.43 lakh-₹2.46 lakh per 10 grams.
Rajodiya said a soft US inflation print could revive the recent bullion rally, while a hotter-than-expected number could strengthen the dollar and put pressure on gold and silver.
Meanwhile, the domestic physical market could provide another layer of support as the festive and wedding season approaches.
Darshan Desai, CEO, Aspect Bullion & Refinery, said gold prices around ₹1.53 lakh per 10 grams had remained broadly stable over the past week, which he viewed as encouraging for physical demand ahead of the festive season. He expects festive buying and gifting to support demand for coins, bars and customised bullion.
Gold, silver outlook: What investors should watch
For now, bullion prices are being pulled in different directions. Geopolitical tensions and a weaker dollar are supporting gold, while oil above $100 and the possibility of higher US rates are limiting the upside.
The immediate trigger is US inflation data. A softer CPI reading could revive expectations of easier monetary policy and support precious metals, while a stronger reading could push US yields and the dollar higher.
For Indian investors, movements in the rupee, international gold and silver prices, crude oil and domestic physical demand will determine how the global move translates into MCX prices.
-With Reuters inputs
