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Gold Price Outlook: Gold prices showed a mixed trend on September 4. In the Delhi bullion market, gold closed higher for the second consecutive day. Meanwhile, both gold and silver saw a softening trend in the international market. Earlier this week, gold had risen to reach $4,550 per ounce. Overall, the week was quite volatile for gold.

Major hurdle for gold futures at ₹1.60 lakh

Analysts state that, technically, there is a major resistance level for gold futures at ₹1.60 lakh per 10 grams on the commodity exchange MCX. If it crosses this level, it could climb to between ₹1.65 lakh and ₹1.70 lakh per 10 grams. Support for gold futures lies in the ₹1.50 lakh to ₹1.52 lakh per 10-gram range. However, if gold futures drop below ₹1.48 lakh, a decline could follow.

Factors influencing gold prices

Currently, five factors could impact gold prices, and investors need to keep a close watch on them. These include the US Federal Reserve's policy, the US dollar and bond yields, US economic data, gold purchases by central banks, and the movement of the rupee.

August inflation data crucial for gold

Fed Governor Christopher Waller has indicated that if inflation data shows no rise, he would support keeping interest rates unchanged at the Federal Reserve's meeting on September 15-16. He also emphasized the importance of the August inflation data. Rising interest rates have a negative impact on gold prices, whereas falling interest rates boost gold's appeal.

Close watch needed on dollar and yields

The dollar has strengthened alongside a nearly 2% rise in the Japanese yen. A weaker dollar and falling bond yields provide support to gold prices, whereas a surge in bond yields and a strengthening dollar have a negative impact on them. Recently, there has been a rise in US 10-year bond yields; however, the Federal Reserve and the government are taking measures to keep them under control.

**Fed's current focus on controlling inflation**

US inflation data is due for release next week, which could directly influence the Federal Reserve's policy decision on September 16. Federal Reserve Chairman Kevin Warsh has already stated that the current focus will be on keeping inflation in check. The Fed has set an inflation target of 2 percent and may take necessary steps to achieve it.

**Gold supported by central bank buying**

Central banks across various countries are purchasing gold, providing support to the metal's price. Goldman Sachs estimates that central banks could buy an average of 50 tonnes of gold per month this year. The firm has also set a target of ₹4,900 for gold by the end of the year. Rising uncertainty in the global economy has prompted central banks to increase their investment in gold.

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