Gold prices surged nearly 5 per cent on a weekly basis as of 22 August, drawing support from a softening US dollar and fading expectations of an imminent Federal Reserve rate increase. The rally underscores how shifting US monetary signals are reshaping global commodity markets.

Domestic Gold and Silver Prices

On Friday, MCX gold futures (October) were broadly flat, while MCX silver futures (September) advanced 1.28 per cent. The yellow metal stood at ₹1,62,440, while silver futures were quoted at ₹2,46,360 per kg.

According to data published by the India Bullion and Jewellers Association (IBJA), the price of 10 grams of 24-carat gold rose to ₹1,58,860 on Friday, up from ₹1,54,066 at Monday's market opening — a gain of over ₹4,794 through the week.

What Drove the Rally

Softer US inflation readings, weaker retail activity, and subdued consumer sentiment from the previous week continued to dampen expectations of near-term monetary tightening. Markets have largely priced out a September rate hike, analysts noted. A US Treasury announcement that it would double its long-dated bond buybacks pushed long-term yields lower, further bolstering bullion.

'A temporary pullback in Treasury yields following the buyback announcement, along with softness in the US dollar, created a supportive backdrop for gold and silver, while concerns over the US fiscal outlook remained in focus,' a market participant said.

Crude Oil Tensions Add Tailwind

Gold and silver also drew support from a second consecutive weekly gain in crude oil, driven by lingering tensions in West Asia. WTI crude gained around 5.7 per cent for the week, trading above $86 a barrel, after a 60-day US-Iran negotiation window expired without meaningful progress.

Iran continued to insist that the Strait of Hormuz will remain closed until US sanctions and other conditions are addressed, even as separate discussions with Oman over management of the waterway continue. Geopolitical uncertainty of this nature typically pushes investors toward safe-haven assets such as gold.

Silver Outperforms; Rupee a Factor

Silver emerged as the stronger performer of the week, climbing to its highest level in two months, supported by robust industrial demand and renewed interest in the debasement trade. This is notable as silver often lags gold in risk-off rallies but outpaces it when industrial sentiment is also firm.

Currency movements added another layer of support for domestic prices. The Indian rupee eased nearly 0.3 per cent during the week, as elevated crude prices increased India's import burden. A softer rupee raises the domestic cost of imported bullion, providing additional upside to MCX gold and silver even when international prices are flat.

Key Technical Levels to Watch

For Comex Gold, analysts place immediate resistance in the $4,700–$4,730 zone, with support at $4,570–$4,600. On the domestic front, MCX Gold faces resistance at ₹1,62,500–₹1,63,000, while support lies at ₹1,58,500–₹1,59,000, according to analysts. How prices behave around these levels in the coming sessions will signal whether the weekly rally has further legs.