Gold Prices Remain Volatile Amid US Dollar and Bond Yields

Traders are likely to monitor gold prices closely as they adjust to a changing market landscape. The US dollar's movements and bond yields will be key factors in determining the metal's trajectory.

Last week, gold futures for October delivery rose Rs 1,597 to close at Rs 1.54 lakh per 10 grams on the Multi Commodity Exchange (MCX). Silver futures also posted strong gains, rising Rs 6,629 to end the week at Rs 2.41 lakh per kg.

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According to Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, MCX gold initially opened near Rs 1.5 lakh per 10 gram but recovered strongly towards Rs 1.54 lakh per 10 gram as buying interest emerged at lower levels.

Gold futures have continued to trade steadily, with prices consolidating for the third straight week. However, some bargain buying was seen at corrective levels in the last couple of trading sessions, leading to a positive close.

Pranav Mer, Senior Vice President, EBG - Commodity &amp. Currency Research, JM Financial Services Ltd., noted that the US dollar index and US Treasuries pared some of their gains as oil prices reversed mid-week following the Federal Reserve's 25-basis-point rate hike.

Investor demand for gold exchange-traded funds has remained strong over the past seven to eight trading weeks.

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With major central bank events now over, attention will shift to the People's Bank of China's upcoming monetary policy announcement.

Investor demand for gold is likely to remain strong in the coming week. With the decision expected to be among the factors watched by precious metals investors. Rates are not expected to change, as the decision is set to be closely monitored.