Gold, Silver Prices May Extend Rally Next Week

Gold and silver prices are expected to remain firm next week after posting strong gains, although profit-booking at higher levels could limit the rally.

The US Core Personal Consumption Expenditures (PCE) inflation data and GDP figures will be among the biggest triggers for gold and silver prices.

According to Pranav Mer, Senior Vice President, EBG - Commodity & Currency Research at JM Financial Services, the overall bias is expected to remain positive, though some profit-booking cannot be ruled out.

West Asia developments, particularly the US-Iran peace process and the possible reopening of the Strait of Hormuz, will also be closely monitored.

Gold futures for October delivery gained ₹7,932, or 5.13%, during the week to close at around ₹1.62 lakh per 10 grams on the Multi Commodity Exchange (MCX).

Silver futures for September delivery jumped ₹10,673, or 4.52%, to settle at around ₹2.46 lakh per kg.

Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, said renewed buying interest, softer bond yields and improving liquidity conditions supported gold prices during the week.

The rally was also strong in international markets, with Comex gold futures for December delivery gaining $243.3, or 5.5%, to finish at $4,680.6 per ounce.

September silver futures jumped $4.42, or nearly 7%, to settle at $69.53 per ounce in New York.

Analysts said the sharp mid-week rally was supported by liquidity measures announced by the US Treasury Department involving increased buybacks of longer-dated bonds.

Going forward, inflation numbers, Fed commentary and geopolitical developments are expected to determine whether bullion can extend its recent gains.

The Jackson Hole symposium, scheduled for August 27-29, will also remain in focus, with Federal Reserve Chair Kevin Warsh set to deliver his first keynote address at the event.

This event, along with the US inflation data, will provide crucial insights into the future direction of gold and silver prices.

In conclusion, gold and silver prices are expected to remain firm next week, with US inflation data and Fed signals being closely watched by bullion traders.

The recent rally in gold and silver prices has been supported by various factors, including renewed buying interest, softer bond yields, and improving liquidity conditions.

However, profit-booking at higher levels could limit the rally, and analysts will be closely monitoring the US inflation data and Fed commentary to determine the next direction in precious metals.