WEEKLY OUTLOOK
• Gold prices rebound to $3750 (~Rs 111,000) again, and silver touches a new high of $44 (~Rs 132,500), supported by safe-haven demand amid ongoing geopolitical tensions and concerns over the economic impact of President Donald Trump’s tariffs, alongside robust central bank buying and sustained ETF inflows.
• The Federal Reserve, as was widely anticipated, lowered its benchmark rate for the first time since December by 25 basis points, putting the overnight funds rate in a range between 4.00% and 4.25%. Moreover, the US central bank saw the need for two more rate cuts this year amid worries about a softening US labor market.
This, in turn, lifted the non-yielding gold to a fresh all-time high, levels beyond the $3,700 mark on Wednesday.
• US Treasury bond yields and the US dollar recovered sharply after a brief slump that followed the announcement, as Fed Chair Jerome Powell said that risks to inflation are tilted to the upside.
Speaking to reporters, Powell added that the central bank is in a meeting-by-meeting situation regarding the outlook for interest rates. This, in turn, weighed on the non-yielding yellow metal and led to a dramatic intraday turnaround.
• Alongside the policy decision, the US central bank also published updated economic forecasts, and now expects the economy to grow by 1.6% this year, 1.8% in 2026, and 1.9% in 2027.
Meanwhile, the Fed’s core PCE estimate, which excludes the more volatile food and energy components, implies a 3.1% pace of inflation this year, 2.6% next year, and 2.1% in 2027, while the long-term forecast remained unchanged at the 2% target.
• On the geopolitical front, Russia's Defence Ministry said that our troops are advancing in practically all directions in the zone of the special military operation. Separately, German Chancellor Friedrich Merz warned that Russia has been testing the limits by violating NATO and EU airspace.
Moreover, European Commission head Ursula von der Leyen wants the European Union to quicken the halt of Russian gas and oil imports.
• The Israeli military has intensified its use of booby-trapped armored vehicles to demolish residential neighborhoods in Gaza City and is pressing ahead with a brutal offensive that has drawn widespread international condemnation.
The EU is considering imposing tariffs on Israel and sanctioning extremist ministers in the government to pressure Israel to end the war in Gaza, which has now dragged on for 23 months.
• Traders now look forward to Thursday's US economic docket—featuring the release of the usual Weekly Initial Jobless Claims and the Philly Fed Manufacturing Index—for some impetus later during the North American session.
Apart from this, the Bank of England policy update could infuse some volatility and influence the precious metals ahead of the crucial Bank of Japan monetary policy decision on Friday.
Economic Calendar this week
• Gold Oct Futures has given a breakout above $3730 (~Rs 110,500), the next target would be $3800 (~Rs 113,500). If prices top out and fall below $3660 (~Rs108,700), then only we could see futher profit booking.
Gold Oct Futures Daily Chart
• Silver Nov Future prices have given a breakout above its consolidation range of $41.5 (~Rs 125,000) and $43.4 (~Rs 130,000) for the past few days. This rally has more room for upside towards $45 (~Rs 140,000)
Silver Nov Futures Daily Chart
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