Gold and silver fall in India ahead of Fed Chair Warsh's Jackson Hole address
Indian precious metals retreated on Friday as persistent inflation data and Middle East tensions prompt investors to reduce exposure ahead of crucial Federal Reserve policy guidance.
Indian gold and silver prices retreated during Friday morning trade as investors reduced exposure ahead of US Federal Reserve Chairman Kevin Warsh’s scheduled address at the Jackson Hole symposium. Multi Commodity Exchange gold October contracts fell 0.57 percent to ₹1,58,085, while silver September futures declined 0.55 percent to ₹2,39,320 per kilogram. International markets mirrored this caution, with US gold December futures dropping 0.40 percent to $4,627.95 per troy ounce.
The pullback highlights growing anxiety that stubborn inflation could force the central bank to increase borrowing costs from their current elevated levels. The federal funds rate currently sits in a target range of 3.5 percent to 3.75 percent after the Federal Reserve held policy unchanged for a fifth consecutive meeting on July 29. Headline Personal Consumption Expenditure inflation rose 3.7 percent year-on-year in July, marking the 65th straight month above the 2 percent target, while core PCE increased 3.3 percent annually.
Market participants are looking to the Jackson Hole symposium for clearer signals on the interest rate trajectory. "Investors await Fed Chair Kevin Warsh’s Jackson Hole speech for clearer policy cues," said Ravi Singh, Chief Research Officer at Master Capital Service. He noted that resilient economic growth and elevated core PCE support expectations for a steady rate in September, while high US debt provides underlying support for the metal.
Geopolitical friction in the Middle East continues to complicate the macroeconomic outlook for commodities and equities. Diplomatic efforts are actively underway to resolve the US-Iran conflict, with Qatar Prime Minister Mohammed bin Abdulrahman bin Jassim Al Thani meeting Iranian President Masoud Pezeshkian in Tehran on Thursday. Mediators report that Tehran is currently preparing a list of conditions to reopen the Strait of Hormuz.
Looking at price action, Singh observed that a double-top pattern near recent highs suggests Indian gold could consolidate or retrace toward ₹1,55,000. This level aligns with the rising 21-day exponential moving average and could present a buying opportunity, while a sustained breakout above ₹1,64,500 would target ₹1,68,000. Jateen Trivedi, VP Research Analyst at LKP Securities, expects volatility to remain elevated and forecasts MCX gold trading between ₹1,55,000 and ₹1,61,500 in the near term.
