New Delhi: There was a strong rise in the prices of gold and silver last week. Both the precious metals performed strongly on the domestic futures market MCX. Now the market is eyeing the US inflation and GDP data to be released next week. According to experts, if inflation figures remain softer than expected then the rise in gold and silver may get further support. However, the possibility of a temporary decline in prices due to profit booking amid record high levels cannot be ruled out.
Gold and silver showed strength on MCX
In the domestic futures market, gold for October delivery rose by ₹ 7,932 or 5.13 percent last week to reach around ₹ 1.62 lakh per 10 grams. Similarly, silver for September delivery increased by ₹ 10,673 i.e. 4.52 percent and reached near ₹ 2.46 lakh per kg.
According to experts, increased buying of bullion, softening of bond yields and better liquidity in the market played an important role in strengthening the precious metals.
US inflation data will give next signal to the market
Now next week, investors will keep an eye on America's core PCE inflation data. It is included in the major inflation indicators of the US Federal Reserve. Apart from this, US GDP figures will also be important in terms of market direction.
If inflation figures remain lower than expected, expectations of a cut in US interest rates may strengthen. In such a situation, the possibility of precious metals like gold and silver getting support may increase.
On the contrary, if inflation remains higher than expected, uncertainty regarding interest rates may increase, the pressure of which may be visible on gold and silver prices.
Market also keeps an eye on the developments in Western Asia
Geopolitical developments in the international market also remain important for bullion prices. Developments related to US-Iran in West Asia and the situation related to the Strait of Hormuz may impact the market sentiment.
In case of increasing geopolitical tension, investors can turn to gold as a safe option. At the same time, if the tension subsides, profit booking can be seen at higher levels.
Gold and silver shine in the international market also
Precious metals also performed brilliantly in the global market last week. Comex gold futures rose nearly 5.5 percent to $4,680.6 an ounce. Whereas silver futures closed at $ 69.53 an ounce with a rise of about 7 percent.
This rise also helped in strengthening bullion prices in the domestic market.
Will the rise continue next week?
According to market experts, the bullish trend in gold and silver may continue for now. However, after continuous gains, profit booking can be done by investors at the current higher levels. In such a situation, intermittent correction or temporary softening of prices may be seen.
Therefore, investors will keep a special eye on US inflation, GDP, interest rate expectations and geopolitical developments in West Asia next week.
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Disclaimer: This news is based on the given market data and experts' estimates. Before investing in gold and silver, definitely assess the market risk and your investment capacity.