Gold Hits 3-Month High as Crude Oil Drops Over 12%
Gold prices staged a remarkable recovery this week, posting a 4.5 percent weekly gain that marked its best weekly performance since August. This bullish run unfolded against a backdrop of severe weakness in energy markets, where crude oil benchmarks suffered their worst weekly slide since April 2020. WTI crude oil plummeted from the $104–105 per barrel plateau to near $90, while Brent crude settled in the $97–98 range. Both varieties logged weekly declines surpassing 12 percent.
The flight to safety in gold was propelled by deepening uncertainties in the global artificial intelligence domain. Equity traders have been rotating funds into commodities, with gold emerging as the primary beneficiary. Simultaneously, recalibrating beliefs about future US monetary policy directions have bolstered the case for precious metals.
In Indian futures markets, optimism waned as the week concluded. December gold contracts on the MCX lost ₹1,731 to settle at ₹142,364 per 10 grams, reflecting a 1.20 percent dip. Silver futures for December delivery experienced a slight uptick, gaining 0.10 percent to reach ₹184,977 per kilogram.
The late-week correction was directly linked to exceptionally positive US employment data. The robust labor report strengthened the US dollar and triggered a spike in government bond yields, which subsequently curtailed gains in precious metal prices.
According to the India Bullion and Jewellers Association, 24-carat gold ended Friday at ₹141,452 per 10 grams. This price level signifies a 1 percent weekly uptick from ₹140,054, demonstrating consistent domestic demand despite the Friday easing.
The US Federal Reserve left interest rates on hold in October, but subsequent commentary from officials advocating for further increases to combat inflation shifted market expectations toward stricter policy. Friday’s employment data reinforced this hawkish turn, reporting a 165,000 increase in non-farm payrolls versus an expected 65,000. The unemployment rate also improved to 4.1 percent from 4.2 percent.
With these developments, the odds of a December rate adjustment surged to 81 percent. This expectation lifted 10-year US Treasury yields to approximately 4.88 percent. The resulting dollar strength and elevated borrowing costs exerted downward pressure on gold and silver as trading wrapped up.
Market experts highlight that the recent softening in global gold rates has invigorated physical purchases in India before the Diwali celebrations. Still, they advise that ongoing concerns regarding further rate hikes and expensive credit could dampen sustained price rallies.
Technically, MCX gold futures are expected to encounter resistance between ₹143,000 and ₹143,700, while the ₹140,000–₹141,000 zone serves as critical support. Silver is projected to face resistance in the ₹186,000–₹188,000 range, with support holding firm around ₹178,000–₹180,000.