Gold prices have experienced a ₹431 decline to ₹1.55,344 per 10 grams on MCX, breaking the two-day rally that had seen prices recover above the ₹1.55,000-₹1,55,200 support zone. According to CNBC TV18, the decline was largely attributed to profit-taking after recent gains, with investors turning cautious ahead of the US nonfarm payrolls report scheduled for Friday. As per Jateen Trivedi, VP Research Analyst at LKP Securities, the outlook for gold appears constructive with a sequence of higher highs and higher lows, while prices were previously holding above key short-term moving averages. The recent consolidation near ₹1,55,000-₹1,55,200 appears to be a healthy pause after the recovery, with technical indicators showing RSI at 56, indicating positive but not overheated momentum. The EMA 8 & EMA 21 have turned positive with the faster EMA 8 maintaining bullish alignment over EMA 21, while gold has recovered from the lower band and is now trading in the upper half of the Bollinger Band structure. As per The Times of India, traders may consider a buy-on-dips strategy near ₹1,55,000-₹1,55,200 with a strict stop-loss below ₹1,53,400, targeting ₹1,56,200-₹1,57,200.
Market sentiment has shifted dramatically with traders now pricing in a 50% probability of a Fed rate hike this month, according to the latest CME FedWatch Tool data reported by The Hindu BusinessLine. This represents a significant decrease from the previous 62% probability, with prices jumping 2% on Thursday as traders scaled back expectations after Fed Governor Christopher Waller said he would support leaving rates unchanged if data continued to show inflation pressures moderating. As per Live Mint, Fed Chair Kevin Warsh's pledge to combat inflation further reinforced the hawkish outlook, with nearly 60% of traders now expecting the Fed to raise rates in September, up from 30% before Warsh's remarks. However, some market participants have scaled down on the probability of a rate hike after US President Donald Trump announced that Washington will halt attacks on Tehran, with US Vice President JD Vance declining to provide a timeline for when the conflict would be over. The US nonfarm payrolls report is due at 1230 GMT on Friday, with the ADP National Employment Report showing that private payrolls in the US rose less than expected in August, with just 38,000 jobs added in August, below expectations of 47,000, potentially providing limited direction to policymakers as they consider whether to raise interest rates at their September 15-16 meeting. Data showed the number of Americans filing claims for unemployment benefits rose marginally last week amid low layoffs, pointing to stable labour market conditions.
The domestic decline in gold and silver prices comes despite international gold prices remaining high, with Comex gold trading around $4,528.54 per ounce for the December contract. As per CNBC TV18, the rupee strengthened 0.5% on September 3 to close at 94.4850 against the US dollar, which has reduced the rupee cost of imported bullion and put downward pressure on domestic prices even when international gold prices rise. Vikram Subburaj, CEO of Giottus, noted that this was one reason MCX prices softened despite a sharp gain in international gold in the previous session. The domestic market is also dealing with elevated crude prices, with WTI crude remaining near $92 a barrel amid US-Iran tensions and supply risks, keeping inflationary concerns in focus. Vedika Narvekar, Research Analyst at Anand Rathi Share and Stock Brokers, said gold was holding near $4,480 an ounce after a volatile week and remained on track for a modest weekly gain, with expectations around US monetary policy shifting following dovish comments from the Federal Reserve.
Silver's headline decline also requires closer examination due to the expiry of the September futures contract on September 4. According to CNBC TV18, silver futures for December delivery declined ₹749, or 0.31%, to ₹2.41 lakh per kg, while trading activity had shifted towards the December contract. Subburaj noted that open interest in the expiring September contract had fallen by more than 50%, with the roughly ₹5,700 an ounce difference between the two contracts largely reflecting expiry and rollover dynamics rather than a sudden fall in silver's underlying value. In global markets, Comex silver for December delivery was marginally lower at around $67.63 an ounce. Silver has also been affected by concerns over energy prices and the broader economic outlook, with Akshat Siddhant, Lead Quant Analyst at Mudrex, noting that renewed US strikes on Iran and Iranian retaliation, along with reduced traffic through the Strait of Hormuz and refinery damage across the West Asia and Russia, had heightened supply concerns and kept fuel prices elevated.
Geopolitical tensions remain a pivotal factor affecting precious metals prices, with fears of renewed escalation in the Middle East after the US and Iran exchanged their biggest barrage since July, as reported by The Economic Times. Washington struck Iran's southern coast, while Tehran launched attacks on US bases across the region, adding to geopolitical uncertainty that has kept safe-heaven demand in focus. According to The Economic Times, geopolitical uncertainty surrounding the US-Iran conflict is another factor keeping safe-heaven demand in focus, although its impact is being weighed against the inflationary pressure from elevated oil prices. Over the past one month, gold prices have advanced around 9%, demonstrating sustained momentum in the precious metals market, while silver prices have advanced by nearly 13% over the same period. Though gold is often viewed as an inflation hedge, elevated interest rates tend to weigh on the non-yielding asset, as noted by The Economic Times. Meanwhile, US Vice President JD Vance said the fighting between Washington and Tehran was not a war and declined to provide a timeline for when the conflict would be over, underscoring the challenge the Trump administration faces as the hostilities enter their seventh month and mid-term elections loom.
For Indian investors, global prices will not be the only variable to watch, as the rupee, crude prices and futures positioning can also determine how much of any international move gets reflected in domestic gold and silver prices. According to CNBC TV18, gold could remain firm going ahead, but prices need to sustain above $4,550 an ounce for the next leg higher. Technical analysts have provided important support and resistance levels for both gold and silver ahead of Friday's key data releases. For gold, support is placed at $4,484-$4,440 per troy ounce with resistance at $4,555-$4,610, while silver has support at $66.60-$65.50 with resistance at $68.80-$70.00 per troy ounce. On the MCX, gold has support at ₹1,54,400-₹1,53,750 and resistance at ₹1,56,600-₹1,58,000, while silver has support at ₹2,40,000-₹2,37,700 and resistance at ₹2,45,000-₹2,48,000. The next major cue is the US employment data, with Gaurav Garg, Head of Research at Lemonn, noting that the nonfarm payrolls report could influence the dollar, Treasury yields and precious metals. Global money managers have been rebuilding gold positions in recent weeks, with exchange-traded fund interest remaining steady, while higher energy costs could add to inflationary pressure, making the interest-rate outlook an important factor for precious metals.
