On COMEX, gold futures were trading at $4,159.40 an ounce, up $2.60, or 0.06%, in the latest available data on October 6. Silver futures were down $0.20, or 0.33%, at $61.10 an ounce.
In the spot market, gold was little changed at $4,141.31 an ounce, reflecting a pause after recent losses in the precious metal.
What is driving gold and silver prices?
US Treasury yields and Federal Reserve rate expectations remain key factors for precious metals. Higher bond yields increase the opportunity cost of holding gold and silver, which do not pay interest. A stronger US dollar can also make dollar-denominated bullion more expensive for buyers using other currencies.
US Treasury yields have remained elevated amid concerns about inflation and government debt. However, softer-than-expected jobs data have reduced expectations of an interest rate hike by the Federal Reserve this month, providing some support to gold.
Investors are also watching the upcoming US jobs report for further clues on the central bank’s policy trajectory.
Oil prices and geopolitical developments remain additional factors influencing inflation expectations and the outlook for interest rates.
What is the outlook for gold prices?
Prithviraj Kothari, managing director of RiddiSiddhi Bullions and president of the India Bullion and Jewellers Association, attributed the weakness to concerns about an early Federal Reserve rate hike, a firm dollar and elevated Treasury yields. He identified support for gold at $4,110 an ounce, followed by the psychological level of $4,000 an ounce.
Market participants are also tracking the Reserve Bank of India’s monetary policy decision on October 7, along with US economic data and comments from Federal Reserve officials.
Dhruv Joglekar, assistant fund manager at Monarch PMS, expects gold to find support in October, citing the potential for increased physical demand during the festive season and continued central bank buying. He said the market’s focus would be on US economic data and greater clarity on the inflation outlook.
What happened to domestic gold and silver prices on Monday?
In New Delhi, gold of 99.9% purity remained unchanged at ₹1.49 lakh per 10 grams on Monday (October 5), inclusive of all taxes, while silver was steady at ₹2.27 lakh per kilogram, according to local traders.
Subdued demand from jewellers and retailers kept domestic prices in a narrow range. A firm US dollar also limited the upside in international bullion prices.
Domestic prices on Tuesday (October 6) will be influenced by movements in international bullion markets, the rupee-dollar exchange rate and local demand.
-With agencies inputs