Gold experienced a significant downturn, with October delivery gold futures on the Multi Commodity Exchange (MCX) dropping 3.8%, or $6,157, to $1.56 lakh per 10 grams. Similarly, September silver futures plunged 4%, or $9,893, to $2.36 lakh per kilogram. In the international market, COMEX gold futures for December delivery settled the week at $4,680.6 per ounce, a 3.2% decline of $150.7, while silver futures fell 3.64%, or $2.56, to $67.78 per ounce.
The selling pressure was particularly intense on Friday, according to Pranav Mer, Senior Vice President, EBG – Commodity & Currency Research at JM Financial Services Ltd. He attributed this to Federal Reserve Chair Kevin Warsh's speech, whose comments on inflation and monetary policy spurred profit booking across bullion markets. Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, noted that MCX Gold saw a sharp correction from $1.63 lakh to $1.56 lakh per 10 grams.
Looking ahead, markets will closely monitor US labor-market indicators, including non-farm payrolls, unemployment data, and ADP non-farm employment change, which are expected to influence the Federal Reserve's decisions before its September meeting. Geopolitical tensions, particularly the US-Iran conflict and developments around the Strait of Hormuz, are also anticipated to contribute to market volatility and impact oil prices and inflation expectations. Despite the recent correction, silver outperformed gold in August, gaining approximately 21% compared to gold's 15.7% increase, as highlighted by Gaurav Garg, Head of Research at Lemonn Markets Desk.
