Gold prices rose slightly on Friday but are set for a weekly decline of 2.1%, marking the fourth consecutive weekly loss over the past five weeks, according to The Economic Times. Spot gold was up 0.1% at $4,282.98 per ounce by 2:05 p.m. ET, while US gold futures settled 0.5% higher at $4,321.20. The losses were more than double the ₹1,597 gain recorded in the previous week, as traders scaled back their bullion bets following hawkish signals from US Federal Reserve officials. This decline follows the third consecutive session of losses, with the biggest challenge being rising bond yields driven by elevated crude oil prices and fresh fears that the US Federal Reserve could further tighten interest rates. The weakness also turned September's gains into losses, marking a stark reversal from the strong gains in August.
Federal Reserve officials have reinforced expectations for continued monetary tightening, with Fed Governor Michael Barr stating in a speech this week that further rate hikes "are likely to be needed" to bring inflation back to the Fed's 2% target, as reported by Live Mint. New York Fed President John Williams also said the Fed is done with explicit forward guidance, adding that policymakers will instead assess incoming economic data before deciding on future policy moves. This comes a week after the Fed raised its benchmark interest rate by a quarter of a percentage point, with officials now signaling that further rate hikes may be necessary to combat persistent inflationary pressures. Markets are now pricing in a 66% probability of an October hike and a 93% chance of one in December, according to CME's FedWatch Tool, up from 55% just a day earlier for October hikes, as reported by The Economic Times. Although gold is traditionally seen as a hedge against inflation, higher rates can curb its demand by increasing the appeal of yield-bearing assets, creating additional downward pressure on precious metals prices.
The unrelenting surge in Treasury yields has set gold on course for its fourth weekly decline over the past five weeks, with the US benchmark 10-year bond yield hitting a fresh 19-year high, according to The Economic Times. Investors are demanding greater compensation to hold bonds as concerns about persistent inflation, government spending, and surging corporate borrowing to finance the artificial intelligence buildout intensify. The biggest challenge for the yellow metal has been rising bond yields, driven by elevated crude oil prices, raising fresh fears that the US Federal Reserve could further tighten interest rates. According to Ashish Rajodiya, Head – Commodities at PL Capital, gold was trading around $4,288 an ounce globally, with the dollar index rising to the 101 mark, its highest level in almost two months. The US 10-year Treasury yield was near 5.11%, its highest level since July 2007, he added. Higher borrowing costs are typically negative for bullion as it pays no interest.
Negotiators in New York are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, as reported by Reuters citing sources, according to Live Mint. Following this development, crude oil prices retreated modestly but were on track for weekly gains. Since the onset of the US-Israeli war on Iran, rising energy prices kept inflation concerns alive, forcing central banks to adopt tighter policy frameworks to keep price pressures under check. Oil prices dropped about 3% as some supply fears eased, according to The Economic Times. Gold and silver prices gained on Friday, September 25 amid US-Iran uncertainties, higher bond yields and fueled expectations of further rate hikes by Federal Reserve, according to Kotak. Spot gold rose 0.7% to $4,303 today, down almost 2% from last Friday, while Silver also climbed 1.5% to around $64.8/oz. In India too, bullion prices jumped as MCX gold October futures contract advanced 0.7% to ₹1,51,669 per 10 grams, while MCX silver December futures contract climbed 1.21% to ₹2,36,301 per kg. However, the gains were overshadowed by the broader market pressures from rising yields and Fed policy signals.
According to Kotak, the fundamental outlook for the bullion is cautiously positive medium term, but pressured near term. With gold around $4,300, a fresh catalyst is required for the next move. For spot gold, resistance is expected at $4,321.5, followed by $4,339.7 and $4,398.8, while support is seen at $4,262.4, $4,244.1 and $4,185. For MCX Gold October futures, resistance levels are placed at ₹1,52,157, ₹1,52,602 and ₹1,54,043, with support at ₹1,50,717, ₹1,50,272 and ₹1,48,831. In case of MCX Silver, resistance is likely at ₹2,38,099, ₹2,39,290 and ₹2,43,145, with support at ₹2,34,245, ₹2,33,054 and ₹2,29,199. For spot silver, resistance is estimated at $65.44, followed by $65.95 and further upside of $67.62, while support is seen at $63.77, $63.26 and $61.59. Brokerage firm ICICI Global Markets expects domestic gold prices to remain largely driven by developments in the global gold market, with movements in the INR providing an additional source of volatility. Physical demand should receive some support as the festive and wedding season progresses, with the brokerage retaining its view that local gold prices are likely to trade in the ₹1,40,000 to ₹1,60,000 per ten grams range over the remainder of 2026.
The price decline affected all gold categories significantly, with 18-karat gold also dropping ₹114 per gram to ₹11,451, as per Goodreturns. For 8 grams, 24-karat gold is priced at ₹1,22,144 (down ₹1,216), 22-karat at ₹1,11,960 (down ₹1,120), and 18-karat at ₹91,608 (down ₹912). The 10-gram rates show 24-karat at ₹1,52,680 (down ₹1,520), 22-karat at ₹1,39,950 (down ₹1,400), and 18-karat at ₹1,14,510 (down ₹1,140). For 100 grams, 24-karat gold is now priced at ₹15,26,800 (down ₹15,200), 22-karat at ₹13,99,500 (down ₹14,000), and 18-karat at ₹11,45,100 (down ₹11,400). Bullion has fallen about 19% from its February 27 session high, as reported by The Economic Times. Gold is traditionally considered an inflation hedge and a safe investment during geopolitical uncertainty. However, higher interest rates tarnish its attractiveness as investors turn to yield-bearing assets.
