New Delhi: Gold recorded its strongest weekly gain since August with nearly 4.5 per cent surge as crude oil suffered its steepest weekly decline since April 2020 over hopes of policy shifts following the US midterm elections.
Concerns surrounding the global artificial intelligence sector drove sharp flows from equity markets to commodity markets, while a changing Federal Reserve outlook also improved positive sentiment for precious metals.
On Friday, MCX gold futures expiring December declined 1.20 per cent while MCX silver futures for December advanced 0.10 per cent. Gold futures stood at Rs 1,42,364, while silver futures stood at Rs 1,84,977 per kg.
WTI crude retreated from above $104-$105 a barrel to around $90, while Brent eased to the $97-$98 range, with both benchmarks posting weekly declines of over 12 per cent.
After 4.5 per cent gains, prices retreated from their intraday highs after the stronger employment report lifted the dollar and Treasury yields.
The price of 10 grams of 24-carat gold was at Rs 1,41,452 on Friday, up from Rs 1,40,054 seen last week’s close, according to data published by the India Bullion and Jewellers Association (IBJA).
Though the Fed had left interest rates unchanged at its October meeting, subsequent remarks by two officials favouring further gradual rate increase to contain persistent inflation added to expectations of additional monetary tightening.
The October US employment report, released on Friday, reinforced this hawkish outlook, with nonfarm payrolls rising by 165,000 against market expectations of 65,000, while the unemployment rate edged down to 4.1 per cent from 4.2 per cent.
The stronger-than-expected labour-market data pushed the implied probability of a December rate hike to around 81 per cent.
US Treasury yields moved higher in response, with the 10-year yield approaching 4.88 per cent, while the dollar strengthened, renewing downward pressure on precious metals towards the close of the week.
Lower international gold prices also attracted physical buying in India ahead of Diwali, analysts said. Nevertheless, expectations of further Fed tightening and higher borrowing costs continued to limit the sustainability of bullion’s recovery, they added.
Immediate resistance of MCX Gold is placed at Rs 1,43,000–Rs 1,43,700. On the downside, Rs 1,41,000–Rs 1,40,000 remains the immediate support zone. The immediate resistance for MCX Silver stood at Rs 1,86,000–Rs 1,88,000, with Rs 1,78,000–Rs 1,80,000 zone as immediate support levels, analysts said.
