Fed decision, oil prices to dictate bullion’s course

New Delhi: Gold and silver are expected to face fresh headwinds next week as surging crude oil prices revive inflation concerns, while the US Federal Reserve’s policy decision could determine whether bullion rates stabilise or extend their downward trend, analysts said.

The precious metals, already battered by elevated bond yields and a stronger dollar, will look to the Federal Reserve’s October 27-28 meeting and its chair’s commentary for signals on whether interest rates could stay higher for longer. The focus will also be on policy decisions from the European Central Bank and the Bank of Japan, along with US durable goods orders, consumer confidence, Personal Consumption Expenditures inflation and third-quarter GDP data.

Eurozone inflation readings, developments around the US mid-term elections, Russia-Ukraine peace talks and the West Asia conflict will also remain on the radar, they added. “The near-term outlook remains cautious, with gold likely to remain under pressure until there is greater clarity on the Federal Reserve’s policy path. The upcoming decision could determine whether prices stabilise near current levels or extend their corrective trend,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

The pressure was evident in domestic markets, where gold futures for December delivery on the Multi Commodity Exchange (MCX) fell Rs 5,768, or nearly 4 per cent, over the past week to close at Rs 1.42 lakh per 10 grams. Silver suffered a steeper decline, slipping below the Rs 2 lakh mark, shedding Rs 15,087, or 7.14 per cent, to settle at Rs 1.96 lakh per kg.