Gold prices held firm above $4,200 per ounce on Friday, headed for their strongest weekly performance since January, as optimism over a potential diplomatic resolution in West Asia and cooling US rate-hike expectations continued to support precious metals ahead of a closely watched jobs report. Spot gold traded at $4,262.39 per ounce, up 0.60% on the day, while MCX gold quoted around ₹1,31,850 per 10 grams. Silver rose 1.30% to $62.20 per ounce, showing continued strength despite recent volatility. Gold had touched $4,267.64 earlier in the week, its highest level since June 18, after surging 4.18% in a single session. The week's rally was fuelled by a combination of factors: a weakening US dollar, falling Treasury yields, and diplomatic signals around the Strait of Hormuz.
The precious metals rally was significantly boosted by reports of negotiations between Iran and Oman over the reopening of the Strait of Hormuz progressing smoothly. A proposed agreement between Iran and Oman aimed at ending the five-month conflict would give Tehran control over ships entering the Gulf through the Strait of Hormuz, according to a senior Iranian source and two regional officials told Reuters. US President Donald Trump told reporters he expects the conflict with Iran to end soon, while US Treasury Secretary Scott Bessent indicated a deal to reopen the strategic waterway could come as early as Friday. Qatar's mediators also reported progress, with a framework proposal under discussion that would reportedly see Iran, potentially through an arrangement involving Oman, exercise control over Strait of Hormuz shipping, with restrictions on US and Israeli vessels until compensation is paid. The optimism was further reinforced after US President Donald Trump said late Tuesday that an agreement to reopen the Strait of Hormuz could be reached as early as Wednesday, as Iran and Oman moved closer to a deal.
Recent weak US employment data has modestly strengthened expectations of a Fed rate cut later this year, which is generally supportive of non-yielding assets such as gold. Markets now assign roughly a 43-57% probability of a September rate hike, down from around 63-67% a week earlier, according to CME FedWatch data. A softer jobs report could strengthen expectations of lower interest rates, which would further support gold. A weak ADP jobs report for July, showing only 44,000 private-sector payroll additions, the softest reading since January, reinforced expectations of a cooling labour market and weighed on the dollar and bond yields. Silver continues to draw support from industrial demand, particularly from the renewable energy and electronics sectors, even as near-term trading remains driven by macroeconomic data and investor positioning.
The precious metals rally was further supported by a weaker US dollar, with the US dollar index slipping below 99.8 on Wednesday, its lowest level in seven weeks. This extended last week's sharp decline amid intervention in the yen and foreign selling of long-term dollar-denominated fixed-income assets. A weaker dollar typically boosts demand for dollar-denominated commodities by making them cheaper for holders of other currencies. The US dollar weakened against major currencies, making dollar-denominated commodities such as gold and silver more affordable for overseas buyers. The rally is being driven by multiple factors that have simultaneously turned favourable for precious metals, with the US dollar weakening against major currencies making dollar-denominated commodities more affordable for overseas buyers.
Gold and silver prices in India's retail market showed significant increases amid continued uncertainty and tensions between the United States and Iran. According to Mint, MCX gold rate on 6 August was trading 0.22% higher at ₹1,49,100 per 10 grams, while MCX silver futures were trading about 0.16% lower at ₹2,27,990 per kg at around 9:13 am. In the retail market, gold is sold in 24-karat and 22-karat purity, with 24-karat gold showing higher rates across major cities. New Delhi recorded 24-karat gold at ₹1,48,700 per 10 grams and 22-karat at ₹1,36,308 per 10 grams, while Chennai showed the highest rates at ₹1,49,390 and ₹1,36,941 respectively. Silver 999 Fine rates varied significantly, with New Delhi at ₹2,27,660 per kg, Mumbai at ₹2,28,060 per kg, Bengaluru at ₹2,28,240 per kg, Kolkata at ₹2,27,750 per kg, and Hyderabad at ₹2,28,240 per kg. Chennai recorded the highest silver rates at ₹2,28,720 per kg. For trading recommendations, gold has support in the ₹1,47,200-1,46,000 range and resistance at ₹1,50,000-1,51,500, while silver shows support at ₹2,25,500-2,23,000 and resistance at ₹2,30,000-2,34,400. The next major trigger for bullion prices is the US non-farm payrolls report due Friday evening, with consensus forecasts pointing to a headline print of 80,000 jobs, an unemployment rate of 4.2% and average hourly earnings growth of 3.5% year-on-year.
