Gold Price Today: Why Did Gold Fall Nearly 2% This Week?

Gold prices ended the week nearly 1.86% lower as investors reacted to fresh US economic data and a more hawkish outlook from the Federal Reserve.

October gold contracts on the Multi Commodity Exchange declined 1.63% on Friday, while September silver futures dropped 1.66%.

Gold futures closed at Rs 1,56,400, whereas silver finished at Rs 2,36,651 per kg.

Data from the India Bullion and Jewellers Association showed that 24-carat gold traded at Rs 1,59,578 per 10 grams on Friday, compared with Rs 1,62,603 at the beginning of Monday’s session.

Gold had gained earlier in the week as investors responded to concerns about currency depreciation and increased support for longer-term US Treasury bonds.

The rally lost momentum after US economic indicators pointed towards stronger activity than markets had anticipated.

The July personal consumption expenditures inflation figure reached 3.7% year-on-year, while labour and trade data indicated resilience in the US economy. These developments encouraged investors to expect the Federal Reserve to maintain restrictive interest rates for longer.

Federal Reserve Chair Kevin Warsh influenced rate expectations through his hawkish remarks at the Jackson Hole symposium.

Gold briefly plunged by approximately $70 within minutes of his speech before recovering some of its losses.

Silver followed a similar pattern after reaching a 10-week high and subsequently giving up part of its gains.

Market expectations for a September rate hike strengthened, while projections for interest rates at the end of the year climbed to their highest level in three weeks.

Copper similarly touched fresh record highs before retreating.

Analysts have identified $4,600-$4,630 as the immediate resistance range for Comex Gold, with support positioned between $4,500 and $4,470.

For MCX Gold, the next resistance zone stands at Rs 1,59,200-Rs 1,60,000, while immediate support lies between Rs 1,56,200 and Rs 1,55,500.