Gold and silver carried last week’s late-summer rally forward, though Friday’s profit-taking clawed back some of the gains as traders sifted through a whipsaw run of US inflation data and reset their Federal Reserve rate-hike expectations.

The tone for the week was set before Monday’s open even arrived. A surprisingly weak July non-farm payrolls report — a drop of 23,000 jobs against expectations of an 80,000 gain, plus a net 103,000 downward revision to the May-June figures — had already deflated hawkish Fed bets, sending gold and silver into the week on firm footing. Wednesday’s softer-than-forecast CPI backed up the disinflation story, but Thursday’s core PPI, up 0.4% on the month, muddied things and pushed the market’s implied odds of a September rate hike back up toward 40%, from over 50% a week earlier.

Geopolitics stayed a steady undercurrent rather than delivering any fresh shock. Talks to reopen the Strait of Hormuz remained stuck through the week, with President Trump turning down Iranian compensation demands, which kept a floor under safe-haven demand even as the broader risk premium eased somewhat from earlier peaks. Brent crude’s swings on Hormuz-related headlines flowed straight through to the rupee, pressuring USDINR alongside steady dollar demand from importers.

The Dollar Index spent the week largely rangebound, holding a tight band between roughly 99.4 and 99.9 as it worked through the sharp two-percent slide from late July’s highs above 101.60. With three soft labour and inflation prints landing back to back and the index barely moving, DXY now sits squeezed between its 50- and 200-day moving averages, technical setup traders are watching closely ahead of the Jackson Hole symposium later this month. Traders are now pricing in a 30% chance of a September rate hike, down from 47% a month earlier, according to CME’s FedWatch Tool.

Looking ahead to this week, markets will watch FOMC minutes, July industrial production data, the Philadelphia Fed Manufacturing Index, and flash August PMIs, with Fed Chair Kevin Warsh’s remarks at the Jackson Hole symposium later this month shaping up as the next major catalyst for both DXY and precious metals positioning.

With gold consolidating in the range of $4,300–4,450 band and silver is trading in the range between $63.5 -$66.5, where both metals head next likely depends on how convincingly the softer inflation story reasserts itself against Thursday’s hawkish PPI surprise.

Gold has taken the ball and run with it to start the week, with soft inflation numbers keeping the U.S. dollar under pressure and giving gold extra headroom to push towards the $4500 level and silver seems to touch $70 soon.

Dr.Renisha Chainani, Head- Research, Augmont