Gold Likely To Consolidate, Eyes On Fed Meet & Trade Talks

Key Highlights:

- Gold futures corrected over 2.7 percent on MCX amid lower safe-haven demand and profit booking.

- US Fed and BoJ meetings, PCE inflation data, and trade deal progress to guide gold's next move.

- Global gold prices dropped as tariff truce and risk-on sentiment reduced market uncertainty.

New Delhi: Gold prices are likely to remain in a consolidation phase in the upcoming week, as traders turn cautious ahead of critical economic and geopolitical developments. Analysts believe that key central bank meetings and global trade negotiations will influence investor sentiment and the short-term outlook for the precious metal.

The US Federal Open Market Committee (FOMC) meeting, Bank of Japan’s rate decision, and negotiations around the August 1 trade deal deadline are being closely watched. The end of the suspension period on US-imposed tariffs, including those affecting India, could influence market volatility.

Gold Falls ₹1,400 To ₹99,620 Per 10g; Silver Plunges ₹3,000 After Record High

Central Banks and Trade Talks in Focus

Pranav Mer, VP at JM Financial Services, highlighted that both the US Fed and the BoJ are expected to maintain interest rates. However, their forward guidance will be crucial. While the Fed faces pressure to ease monetary policy, the BoJ is being monitored for possible hikes.

In the domestic market, gold futures for October delivery on the Multi Commodity Exchange (MCX) dropped 2.74 percent, from a high of Rs 1,01,543 to Rs 98,764 per 10 grams, reflecting broader global sentiment.

Lower Safe-Haven Demand Weighs on Prices

Prathamesh Mallya of Angel One noted that gold prices took a pause after a strong July rally, with corrections driven by profit booking and waning demand for safe-haven assets. Optimism around trade negotiations between the US and major economies like Japan and the EU further pressured prices.

Gold Tumbles ₹700 To ₹98,420/10g, Strong US Dollar & Fed Rate Worries Weigh

Globally, Comex gold futures for August delivery fell by USD 37.90 (1.12 percent) to USD 3,335.60 per ounce. N S Ramaswamy from Ventura attributed this to reduced risk perception following an extended tariff truce between the US and China, along with a boost in US stock markets driven by AI-related earnings.

Outlook Hinges on Fed Tone and Trade Outcomes

The upcoming US GDP and PCE inflation data will also be crucial in shaping expectations around future Fed moves. While short-term weakness persists, analysts suggest that central bank gold buying—especially by China—could provide support later in 2025.

(With PTI Inputs)