Price Movement – Gold and silver are holding steady above $4600 and $68 respectively with a bullish tilt, as markets continue digesting the U.S. Treasury’s move to double the size of its liquidity support buyback operations for longer-dated notes and bonds — a decision that pushed the dollar to an over three-month low last week.

Geopolitical tensions – Iran said it has resumed talks with neighboring Oman to help manage security in the Strait of Hormuz, sending oil prices lower. IMF Managing Director Kristalina Georgieva noted that the global economy has weathered the shock from the Iran conflict better than many had feared, though she flagged growing concern over deteriorating fiscal conditions in several countries.

Macro-Economic Signals – Attention now turns to Wednesday’s U.S. PCE inflation report for July and Fed Chair Kevin Warsh’s remarks at the Jackson Hole symposium on Friday, both seen as key signals for the Fed’s next policy move. While the central bank watches PCE closely against its 2% target, this month’s softer producer and consumer inflation readings have already dialed back expectations of imminent U.S. rate hikes.

Technical Triggers    

Gold has already hit its $4,600 (~ Rs 162,000) target, briefly touching a high of $4,696 (~Rs 164,700), and could now see some profit-booking and consolidation from these levels.

Silver came close to its $70 target too, peaking at $69.96 (~Rs 248,800), and may also be due for a pause as traders lock in gains.

Dr.Renisha Chainani, Head- Research, Augmont