Gold on the Multi Commodity Exchange of India (MCX) recorded its fifth consecutive weekly advance, adding nearly ₹8,000 per 10 grams to close at ₹1,62,438. The August rally has now pushed month-to-date gains to 13.3%, equivalent to roughly ₹19,000, while year-to-date returns stand at 20%. The sustained upward move comes as a weakening U.S. dollar and diminished expectations of a Federal Reserve rate hike continue to support demand for bullion.
Weaker dollar and Treasury yields drive investor sentiment
The U.S. dollar index fell to a three-month low of 98.44 during the week, before recovering slightly to 98.57. The currency came under pressure after the U.S. Treasury announced plans to at least double the size of its buybacks of longer-dated debt, a move aimed at containing bond yields. Treasury Secretary Scott Bessent signalled that further increases in repurchases were possible, adding to investor uncertainty about the fiscal outlook.
Long-dated Treasury yields rose sharply, with the 30-year bond yield hitting its highest level since 2007. Traders attributed the jump to concerns over the deteriorating fiscal position—U.S. national debt has reportedly surpassed $40 trillion—heavy debt issuance, geopolitical risks linked to the conflict with Iran, and the lack of clarity on the Federal Reserve’s policy path. A divided Federal Reserve left interest rates unchanged at its July meeting, and Chair Kevin Warsh offered few clues about how policymakers view persistent price pressures. Markets now look to his speech at the Jackson Hole symposium next Friday as a potential catalyst.
Technical picture: bullish trend but near-term caution warranted
From a technical perspective, the weekly relative strength index (RSI) has risen to 65.03, indicating a strengthening upward trend. However, the daily RSI stands at 76.10, which falls into overbought territory—suggesting the pace of gains may have become stretched in the near term. Analysts highlight a key resistance zone between ₹1,62,500 and ₹1,63,000; a sustained close above ₹1,63,000 would signal a continuation toward ₹1,65,000. On the downside, immediate support lies in the ₹1,58,500–₹1,59,000 band, with further support at ₹1,55,500–₹1,56,000. A break below ₹1,58,500 would indicate that the rally is due for a deeper correction.
Ponmudi R, CEO of Enrich Money, described the commodity outlook as “constructive for precious metals but highly volatile for energy.” He noted that gold and silver could continue to benefit from the reduced likelihood of an immediate Fed tightening. However, he cautioned that elevated Treasury yields and the inflationary impact of higher oil prices remain key risks. He added that Chair Warsh’s Jackson Hole address would be the pivotal near-term event: a dovish or neutral tone could reinforce expectations of a policy pause, while a hawkish surprise might trigger a rebound in the dollar and renew downside pressure on bullion.
Silver also gains
Silver mirrored gold’s strength, adding ₹10,673 per kilogram to close at ₹2,48,124. The precious metals segment has broadly benefited from the same macro drivers—currency weakness and Fed expectations—that have lifted gold.
Key takeaways
- MCX gold gained nearly ₹8,000 per 10 grams in the week ending August 23, settling at ₹1,62,438.
- August gains reached 13.3% (₹19,000), with year-to-date returns at 20%.
- The U.S. dollar fell to a three-month low while long-dated Treasury yields surged amid fiscal and geopolitical concerns.
- Technical indicators show a bullish weekly trend but an overbought daily RSI, warranting caution at current levels.
Common questions
Why did gold prices rise this week?
Gold was supported by a persistently weaker U.S. dollar, which makes bullion cheaper for holders of other currencies, and by reduced expectations that the Federal Reserve will raise interest rates at its next meeting. The dollar index slipped to a three-month low as Treasury bond yields climbed on fiscal and geopolitical worries.
What are the technical levels to watch for MCX gold?
Immediate resistance is in the ₹1,62,500–₹1,63,000 zone. A close above ₹1,63,000 would open the way toward ₹1,65,000. Support lies at ₹1,58,500–₹1,59,000, with a break below that level suggesting a deeper correction toward ₹1,55,500–₹1,56,000.
What is the outlook for gold in the near term?
The trend remains bullish given the series of higher highs, but the overbought daily RSI (76.10) indicates the rally has become extended. The key catalyst will be Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole next Friday. A dovish tone could extend gains, while a hawkish surprise may strengthen the dollar and pressure gold. Elevated bond yields and rising oil prices also pose risks.
For the latest price, check the live gold price. MCX gold currently trades about 10% below its record high of ₹1,80,779, compared with a gap of around 21% at the start of August, reflecting the strong recovery over the past month.