Daijiworld Media Network - New Delhi
New Delhi, Aug 29: Gold prices fell nearly 1.86 per cent as markets reacted to higher-than-expected US inflation data and a hawkish debut speech by US Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium.
On Friday, MCX gold futures for October delivery declined 1.63 per cent, while September silver futures fell 1.66 per cent. Gold futures stood at Rs 1,56,400, while silver was priced at Rs 2,36,651 per kg.
According to data published by the India Bullion and Jewellers Association (IBJA), 10 grams of 24-carat gold was priced at Rs 1,59,578 on Friday, down from Rs 1,62,603 at Monday's market opening.
The reversal came after a strong surge in bullion prices earlier in the week. July's US personal consumption expenditures (PCE) inflation reading came in at 3.7 per cent year-on-year, while US labour and trade data pointed to a stronger-than-expected economy.
Renewed concerns over currency debasement and US Treasury support for long-dated bonds had earlier pushed bullion to multi-month highs.
However, stronger economic data prompted markets to price in a greater possibility of the US Federal Reserve keeping monetary policy restrictive for longer.
Warsh's hawkish remarks further reset interest-rate expectations, while oil prices eased from recent highs amid fresh signs of diplomatic progress around the Strait of Hormuz.
Gold plunged by roughly $70 within minutes of Warsh's speech before recovering some ground, while silver also surrendered gains from its earlier highs, analysts said.
According to the CME FedWatch tool, the probability of a September rate hike rose from roughly one-in-three to more than two-in-five, while year-end rate expectations climbed to their highest level in three weeks.
Silver mirrored the volatility, rising to a 10-week high before retreating several times during the week. Copper also touched fresh all-time highs before easing.
For Comex gold, immediate resistance is placed in the $4,600-$4,630 zone, while support is seen at $4,500-$4,470, analysts said.
For MCX gold, immediate resistance is placed at Rs 1,59,200-Rs 1,60,000, while support lies at Rs 1,56,200-Rs 1,55,500, they added.