By Dr. Renisha Chainani, Head- Research, Augmont – Gold for all
After trading above $3500 (~Rs 102,000) the week before, gold prices have dropped to their lowest level in more than two weeks, $3400 (~Rs 100,000), as the metal’s appeal as a haven has diminished due to the possibility of global tensions subsiding. According to data released Thursday, the July increase in U.S. producer prices was the largest in three years. The probability of a 25 basis point rate drop by the Fed in September is now 89%, down from almost 95% before the data’s release, according to traders.
Although a peace agreement for Ukraine was not reached during the highly anticipated weekend meeting between Russian President Vladimir Putin and US President Donald Trump in Alaska, Putin did consent to let the US and Europe offer Ukraine strong security guarantees as part of a future agreement to end the conflict. Later today, Trump will meet with European leaders and Ukrainian President Volodymyr Zelensky in an attempt to reach a speedy peace agreement.
The general mood of the market is maintained by dovish forecasts from the US Federal Reserve and hopes that Trump will remove sanctions on Russia and invest instead. However, if the US-Ukraine negotiations go as badly as they have in the past, risk sentiment may turn negative, which would probably increase the allure of gold as a safe haven.
Investors are anticipating Wednesday’s release of the Federal Reserve’s most recent meeting minutes, which may provide further context for the decision to maintain interest rates at their current level. With labour markets trembling, inflation sending conflicting signals, and markets pricing in cuts, Jackson Hole 2025 could prove to be a turning point for U.S. monetary policy.
A short-covering rally in the US dollar, on the other hand, could present new downside risks for gold as traders may turn to profit-taking and repositioning ahead of the annual Kansas City Fed’s Jackson Hole Economic Policy Symposium and the Minutes of the July Fed meeting, which are scheduled for August 21–23. The likelihood of further tariffs, a weakening global economy, a relaxation of U.S. monetary policy, and the ongoing decline of the US currency all support gold’s long-term bullish outlook.
Economic Calendar for this week
If Gold continues its profit-booking, it may fall up to $3300 (~Rs 97,500) this week, while, $3445 (~Rs 100,500) is the strong resistance.
Gold Oct Futures Daily Chart
Silver is expected to trade in the range of $37.5(~Rs 112,500) and $39 9~Rs 115,500) this week.
Silver Sep Futures Weekly Chart
Silver prices have given an upside breakout of their range above $37.5 (~Rs 110,000). This bullish momentum is expected to extend further towards $40 (~Rs 115,000) and $41 (~Rs 118,000).
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