Gold and silver rose in the world market as tensions rose in the Middle East with Israel and Lebanon simultaneously launching rocket attacks against each other. The price of gold rose by Rs 669 per 10 grams and silver by Rs 921 per 10 grams in the Mumbai jewelery market. Gold bounced back after seven consecutive days of declines and silver for eight straight days. The price of gold fell by Rs 5,848 in the last seven days and the price of silver fell by Rs 10,473 in the last ten days.

As America’s Core Personal Consumption Expenditure Price Index came in higher than expected and the US growth rate data announced last week was also stronger than expected, the possibility of a rate cut in September was slightly weakened. The dollar index rose by 0.16 percent to 104.48 points on Monday.

China’s industrial profit rose 3.6 percent in June, up from 0.7 percent in May and 3.5 percent in the first half of 2024. In particular, the profit of government-owned companies increased by 0.3 percent from January to June, which fell by 2.4 percent during January to May, while the profit of private sector companies fell to 6.8 percent from 7.6 percent.

This week, non-farm payroll data, private sector job data, job opening data, consumer confidence data, housing price data, existing home sales, manufacturing, service and private sector growth data for the month of July will be released. After the US growth rate doubled last week, all the data released this week will be crucial in determining the fate of the September rate cut.

The Bank of Japan, the Bank of England and the Central Bank of Brazil will give interest rate decisions this week. In particular, the Japanese yen rose by two percent last week on expectations that the Bank of Japan will increase interest rates by 10 basis points. If the Bank of Japan raises interest rates, the value of the US dollar will fall. Many economists believe that the Bank of England is also in a mood to cut rates. If the Bank of England rate cuts, the dollar will strengthen as the pound weakens.As the weightage of Japanese pound is 13.6 percent and British pound is 11.9 percent in the dollar index, if the decision of both central banks is in opposite direction, the strength of dollar will be maintained. Euro area preliminary inflation will also be announced this week. Besides, China’s manufacturing, service and private sector growth data for the month of July will also be released.

Short term-long term

Rising geopolitical tension in the Middle East and Bank of Japan’s interest rate hike decision will be decisive for gold and silver prices. Russia launched ten rocket attacks on Ukrainian bases, nine of which were thwarted by Ukraine. Thus, even though this war has been going on for the last 27 months, as Ukraine is responding strongly to all Russian attacks, the possibility of ending is still not far-fetched.Islamic extremists, on the other hand, are now bent on poisoning Israel. Hizbulha had killed 12 people by attacking with rockets on the occupied bases of Israel. Israel retaliated by attacking Lebanon. Cease-fire talks between Israel and Hamas have made no progress, and Egypt’s efforts are now faltering, with Hamas officially declaring that the cease-fire is in jeopardy.Apart from geopolitical tension, if the Bank of Japan increases by 10 basis points this week, as the dollar weakens, it will increase the attractiveness of buying gold and silver.

price rhythm

Gold (99.9 touch, ten grams): 68,800
Gold (99.5 touch, ten grams): 68,525
Silver (.999 touch, per kilo): 82,192