Gold, silver likely to extend rally amid inflation

New Delhi: Gold and silver prices are expected to extend their gains next week, as inflation data from major economies and developments on efforts to end hostilities in West Asia are likely to set the tone for bullion, analysts said.

Investors will track inflation numbers from the US, Germany, Japan and India, while upcoming Chinese economic data will also be crucial for industrial metals, they added.

“Gold and silver momentum looks positive and are expected to trade with a positive bias and move up towards Rs 1.57 lakh per 10 grams and Rs 2.80 lakh per kg in the short term,” Pranav Mer, Senior Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd, said.

On the domestic front, gold futures for October delivery climbed Rs 8,444, or nearly 6 per cent, during the week to close at Rs 1.51 lakh per 10 grams. Silver futures for the September contract surged Rs 14,268, or nearly 7 per cent, to settle at Rs 2.31 lakh per kilogram on the Multi Commodity Exchange.

“Gold witnessed a strong rally this week, gaining nearly 6 per cent, as weaker-than-expected US labour market data revived expectations of a more accommodative monetary policy from the Federal Reserve,” said Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities.

The weaker dollar also encouraged fresh buying in precious metals, allowing gold to post one of its strongest weekly gains in recent months, he added.