Weekly Review| Gold’s global dip meets Indian resilience: A volatile week ends on a firm note

Gold prices experienced a volatile week internationally, with the overall trend slightly negative. International spot gold began the week around US$4,433 per ounce and came under pressure as expectations surrounding US interest rates and a stronger US dollar weighed on demand. By September 4, spot gold was around US$4,419 per ounce.

In India, gold prices initially declined during the first half of the week but recovered toward the end. Delhi 24K gold moved from approximately Rs 151,940 per 10 grams on August 31 to Rs 150,310 on September 2, before recovering to around Rs 151,830 on September 4. Pune followed a similar pattern, moving from approximately Rs 151,410 per 10 grams to Rs 149,780 before recovering to around Rs 151,310.

Gold prices over the week ( start price Aug 31 - ending price Sep 4)

International spot ~$4,433/oz vs ~$4,419/oz: Slightly lower

Delhi, 24K ₹1,51,940/10g vs ₹1,51,830/10g: Essentially flat

Pune, 24K ₹1,51,410/10g vs ₹1,51,310/10g: Essentially flat

Mumbai, 24K ₹1,51,410/10g vs ~₹1,53,215/10g: Higher

(Source: Comex, top Indian retailers)

"Commodity markets had one of their most volatile weeks in months, driven by a fresh flare-up in the US-Iran conflict, a sharp reversal in Federal Reserve rate expectations mid-week, and a blockbuster August jobs report on Friday that reversed much of that dovish shift in a single session. Precious metals went through a full round trip—a three-month high, a sharp selloff, a strong rebound, and then a Friday pullback—while oil pushed to fresh multi-week highs as fighting between the US and Iran intensified," said online trading and wealthtech firm Enrich Money's CEO R Ponmudi.

He added that bullion initially found support from geopolitical uncertainty and weakness in the US dollar. However, the escalation in the US-Iran conflict, including Iran's retaliatory attack on Kuwait following renewed US strikes on Iranian rocket launchers near the Strait of Hormuz, produced an unusual market reaction.

"Instead of providing sustained safe-haven support to gold, the resulting surge in crude oil prices heightened inflation concerns and pushed expectations of a September Federal Reserve rate hike sharply higher. Rising Treasury yields and a stronger dollar consequently outweighed safe-haven demand, leading to a sharp correction in precious metals," Ponmudi said.

In conclusion, Indian gold prices ended the week broadly close to their starting levels despite the fluctuations during the week. Local market premiums, taxes, currency movements and differences between city-level benchmarks contributed to variations between Indian markets. The main international factors influencing gold were US interest-rate expectations, movements in the dollar, employment data and continuing demand for gold as a safe-haven asset.