Gold and Silver Prices Surge as Weak US Jobs Data Eases Inflation Fears

Precious metals witnessed a significant rally on the MCX this Friday, with gold and silver prices jumping following weaker-than-expected U.S. labor market data. The shift in U.S. employment figures has led investors to rethink the Federal Reserve's interest rate trajectory, fueling demand for non-yielding assets.

US Labor Market Data Triggers Bullion Rally

The primary catalyst for the current surge in bullion is the recent U.S. nonfarm payrolls report. Data from the U.S. Labor Department's Bureau of Labor Statistics revealed that nonfarm payrolls increased by only 57,000 jobs last month—a figure significantly lower than the 110,000 jobs anticipated by economists in a Reuters poll.

This cooling in the labor market has eased fears regarding persistent inflation and the likelihood of "higher for longer" interest rates. Consequently, the CME FedWatch Tool now indicates a 54% probability of a September rate hike, a notable drop from the 66% probability seen prior to the payrolls report. Lower interest rates generally increase the appeal of gold, as the opportunity cost of holding non-interest-bearing assets decreases.

MCX Performance: Gold and Silver Hit Highs

On the Multi Commodity Exchange (MCX), both metals showed robust gains. Silver futures for September 2026 delivery climbed by Rs 4,912 (2%), reaching Rs 2,38,216 per kg. Gold futures for August 2026 delivery rose by Rs 2,219, trading at Rs 1,47,977 per 10 grams. This movement marks the first weekly gain for bullion (approximately 2.3%) since late May.

In the international markets, the momentum was equally strong. Spot gold rose 1.4% to $4,179.94 per ounce, touching its highest level since late June. Spot silver also saw a significant uptick, gaining 2.3% to reach $62.43 per ounce.

Market Volatility and Technical Outlook

Despite the rally, experts warn of continued volatility. Manoj Kumar Jain of Prithvi Finmart suggests that fluctuations in crude oil prices, the US dollar index, and bond yields could continue to impact prices.

For traders looking at technical levels, the following supports and resistances have been identified:

  • Gold (MCX): Support is pegged at Rs 1,44,400–Rs 1,43,350, with immediate resistance at Rs 1,47,100–Rs 1,48,800. Internationally, resistance sits between $4,180 and $4,240.
  • Silver (MCX): Support levels are at Rs 2,33,000–Rs 2,26,600, while resistance is expected at Rs 2,37,700–Rs 2,41,000. Internationally, silver faces resistance at $63.00–$64.40.

In India's physical markets, gold prices vary slightly by city. In Delhi, 24-carat gold is trading at approximately Rs 1,15,152 per 8 grams, while in Mumbai and Hyderabad, the price for 24-carat gold stands at Rs 1,15,032 per 8 grams. Chennai remains the most expensive major market, with 24-carat gold priced at Rs 1,16,952 per 8 grams.

Key Takeaways

  • US Economic Influence: Weaker-than-expected U.S. nonfarm payrolls (57,000 vs. 110,000 expected) have lowered the probability of a Fed rate hike, boosting gold and silver.
  • Price Surge: MCX silver rose by nearly 2% to Rs 2,38,216 per kg, while gold futures climbed to Rs 1,47,977 per 10 grams.
  • Technical Outlook: Experts predict continued volatility driven by the dollar index and oil prices, with specific support and resistance levels set for both metals.