Gold and silver prices had a week of two halves. Hawkish Fed minutes and speeches, a firm dollar and US Treasury yields at two-decade highs weighed heavily on both metals midweek. Sentiment turned after President Trump spoke of “productive discussions” with Iran, which cooled oil prices and eased inflation fears. The RBI’s first rate hike since 2023 failed to lift the rupee, and the weak rupee cushioned domestic prices. Support stayed firm: China extended its gold buying to a 23rd month, and global ETF holdings hit a record. Indian buyers remain price-sensitive ahead of the festive season, while US CPI data will set the next direction.

PRICE PERFORMANCE

This was a week of two halves for precious metals. Gold spent Monday to Wednesday under pressure from a firm dollar and US Treasury yields at 24-year highs, sliding to $4,066.54 an ounce on Wednesday, its lowest since August 5. Then the tone changed. Bargain hunters stepped in around the $4,000–4,100 zone, oil cooled after Washington signalled talks with Tehran, and the dollar eased. Spot gold finished Friday at $4,194.65, up 1.31% for the week, while COMEX December gold settled at $4,216.30, ending a two-week losing streak. Silver fell harder than gold midweek. It lost 3% on Wednesday and slipped to an August low on Thursday after Waller’s comments, then rebounded 2.4% on Friday. COMEX silver closed at $61.05 (+1.05%), while MCX silver ended flat at ₹2,25,755 after hitting a low of ₹2,19,801. The gold-silver ratio sits near 69. Silver tends to suffer more than gold when rate-hike fears drive the market.

MACRO BACKDROP & FED POLICY – HIKES STILL ON THE TABLE

The Federal Reserve was the main story again. The minutes of the September meeting, released on Wednesday, showed every member backed last month’s hike, though they disagreed on why. Some saw it as insurance against energy-driven price shocks spreading; a more hawkish group saw early signs of demand-led inflation. Either way, most expect another hike before the year is out.

Fed speakers did nothing to soften that message. Governor Christopher Waller said more hikes are likely, though he left the door open to a pause in October. St. Louis Fed President Alberto Musalem and Kansas City’s Jeffrey Schmid said much the same. CME FedWatch ended the week pricing only a 19% chance of an October move but an 84% probability of at least one 25 bp hike by December. The US data was mixed: ISM services eased to 54.9, jobless claims held low at 197,000, and the University of Michigan’s preliminary sentiment index fell to 46.3 from 48.1. Softer September payrolls the week before are the main reason October odds dropped.

GEOPOLITICAL TENSIONS – HORMUZ RISK LINGERS, OIL COOLS

The Middle East stayed in focus all week. Iran warned it would block shipping routes through the Strait of Hormuz that it has not authorised, and tanker operators reported a higher risk of attacks. In the Red Sea, Yemeni government forces said they had retaken much of the coast around the Bab el-Mandeb from the Houthis. The turn came on Thursday, when President Trump said Washington was having “productive discussions” with Iran and that no strike was planned before the November 3 midterms. Brent slipped to around $103 a barrel, still above $100. That cooled inflation fears a little and gave gold room to recover. Fiscal worries in the euro zone, especially France, kept sovereign bond yields elevated and added to the safe-haven case.

CURRENCY MOVEMENT

The Dollar Index touched 102.54 on Monday and closed the week at 102.23, up 0.30%. It got support from high yields and the Fed’s hawkish tone, then gave up some of those gains on Friday as yields came off their highs.

The rupee had a harder week. It weakened 0.50% to 96.78 per dollar as foreign investors kept selling Indian equities (FIIs sold a net ₹12,943 crore on Thursday alone) and crude stayed above $100. The Reserve Bank of India raised the repo rate by 25 bp to 5.50% on October 7 and shifted its stance to “calibrated tightening”, projecting FY27 CPI inflation at 5.2%. The hike did little for the currency in the short run, but traders’ expectation of RBI dollar sales helped the rupee claw back about 23 paise on Friday morning. A weaker rupee kept domestic prices well supported even when international prices fell.

INVESTMENT AND RETAIL DEMAND

Official buying remains gold’s strongest floor. The People’s Bank of China stepped up purchases in September, its 23rd consecutive month of additions. World Gold Council data released this week showed global gold ETFs added 67.3 tonnes in September, taking holdings to a record 4,256 tonnes. Third-quarter inflows totalled 211 tonnes, a record $31 billion, led by North America (+27.7 t in September), Europe (+21.7 t) and Asia (+16.2 t, a third straight month of inflows). The WGC also said weakness in Indian equities was pushing investors towards gold. State Street kept its base-case forecast of $4,750–5,500 by end-Q1 2027, citing record government debt and central bank demand.

TECHNICAL OUTLOOK

  • Spot Gold: Support $4,100 / $4,000; resistance $4,200 / $4,267.
  • MCX Gold: Support ₹1,47,900 / ₹1,46,000; resistance ₹1,52,500 / ₹1,54,000.
  • Spot Silver: Support $58.50 / $57.00; resistance $62.40 / $64.00.
  • MCX Silver: Support ₹2,19,800 / ₹2,15,000; resistance ₹2,29,000 / ₹2,34,000.

WEEK AHEAD

Next week is about inflation. India’s September CPI comes out on October 12, and US CPI on October 14 is expected at 3.6% year-on-year. PPI and retail sales follow on October 15, and Fed Chair Warsh speaks on October 16. A hot US print would revive hike bets and could send gold back to test $4,000. A soft number, on the other hand, could carry it through $4,200 towards the 100-day average near $4,267. Central bank buying, record ETF holdings and the start of India’s festive season all argue for buying on dips rather than chasing rallies.

Dr. Renisha Chainani, Chief Research Officer (CRO),Augmont