Gold prices rose nearly 1.18 per cent on a weekly basis as crude oil prices retreated, even as the metal navigated a week marked by competing pressures from geopolitical tensions, supply disruptions and shifting central bank policy signals.
On Friday, MCX gold futures expiring in October declined 0.84 per cent, while MCX silver futures for December shed 0.16 per cent. Gold futures stood at Rs 1,54,263, while silver futures stood at Rs 2,42,000 per kg, reflecting a modest pullback on the final trading day of the week even as the overall weekly trend remained positive for gold.
The price of 10 grams of 24-carat gold was at Rs 1,53,727 on Friday, up from Rs 1,51,938 seen last Friday, according to data published by the India Bullion and Jewellers Association (IBJA), confirming the metal's net weekly gain despite Friday's individual session decline.
Initial Pressure From Supply Shocks and Fed Signals
Precious metals initially came under pressure while digesting Middle East supply shocks and fresh signals from the Federal Reserve, reflecting a week in which multiple, sometimes conflicting, factors weighed on precious metal pricing from the outset.
Crude Oil's Sharp Decline
Crude oil prices fell for three consecutive sessions to below $100 a barrel on Friday, as markets found that the closure of Saudi Arabia's key pipeline would have a smaller impact on supplies than initially feared. This reassessment of the pipeline disruption's severity allowed crude prices to correct downward after an earlier spike driven by supply concerns.
A Short-Lived Rebound
However, the rebound from the crude price correction proved short-lived, as the US Fed's unexpectedly hawkish outlook overshadowed a rate hike that had been largely anticipated by markets, shifting investor attention away from the crude oil narrative and back toward the implications of the Fed's tightening stance.
A Week Shaped by Rising Yields and Geopolitical Risk
The week started with rising expectations of a rate hike pushing Treasury yields higher and weighing on non-yielding assets like gold. The pressure persisted even as geopolitical and supply risks intensified, with a Saudi East-West pipeline outage and an attack on a vessel in the Strait of Hormuz adding to concerns over disruptions to Middle East energy flows, creating a complex backdrop where both rising yields and heightened geopolitical risk were pulling gold prices in different directions simultaneously.
Silver's Stronger Performance
Silver outperformed gold during the week, receiving additional support from expectations of a sixth consecutive annual supply deficit in 2026 of around 46.3 million ounces, market participants said, a structural supply shortfall that has continued to provide underlying support for silver prices independent of the broader macroeconomic factors affecting precious metals more generally.
The Fed's Rate Decision
The US Fed delivered a 25-basis-point rate hike this week, raising the federal funds target range to 3.75 per cent-4 per cent, marking its first increase since 2023. This move ended a period of rate stability and signalled a renewed phase of monetary tightening from the central bank.
A Preference for Further Tightening
The majority of Fed officials indicated a preference for further tightening this year, keeping the prospect of another rate increase firmly in focus for markets going forward, a signal that likely contributed to the hawkish characterisation of the Fed's overall communication this week.
Market Pricing for a Further Hike
Markets subsequently priced the probability of another rate hike in October at around 55 per cent. Treasury yields moved above 5 per cent, prompting gold and silver to reverse their gains shortly after the Fed's announcement, illustrating how quickly precious metal prices responded to the shift in the rate outlook even within the same trading week.
Technical Levels for Gold
Immediate resistance is placed at the $4,470-$4,500 zone for Comex Gold, while support lies at the $4,300-$4,340 zone, analysts said, giving traders a clear international benchmark range to monitor in the days ahead.
Technical Levels for MCX Gold
For MCX Gold specifically, immediate resistance is placed at the Rs 1,54,000-Rs 1,54,700 zone, while support lies at Rs 1,50,000-Rs 1,50,700, they added, providing a domestic price framework that traders can use alongside the international Comex levels to gauge the metal's likely near-term trading range.
