On the Multi Commodity Exchange (MCX), gold futures for August delivery rose by ₹294, or 0.21%, to ₹1.41 lakh per 10 grams. The contract saw a business turnover of 720 lots. Analysts attributed the rise to fresh buying by market participants.
Silver futures also gained momentum. The September silver contract on MCX climbed ₹1,618, or 0.75%, to ₹2.18 lakh per kg, with a turnover of 1,371 lots.
Globally, silver prices remained firm, with Comex silver futures rising 1.21% to $56.59 per ounce. Gold futures, however, traded slightly lower, declining 0.17% to $4,011 per ounce in New York.
What is driving gold and silver prices?
Precious metal prices have remained volatile in recent sessions due to changing global cues, including geopolitical tensions, inflation concerns and expectations around US interest rate decisions.
According to Prithviraj Kothari, Managing Director, RiddiSiddhi Bullions, President of India Bullion and Jewellers Association Ltd and Chairman, Jain International Trade Organisation, gold and silver witnessed a sharp correction last week, with silver facing a steeper fall.
He said an unusual trend emerged where tensions in the West Asia pushed precious metal prices lower instead of supporting them. A rise in crude oil prices following US-Iran clashes and concerns around the Strait of Hormuz increased inflation worries and strengthened expectations of a possible US Federal Reserve rate hike in September.
Outlook for gold and silver
Kothari said central bank buying, particularly by China, has continued to provide support to gold prices, while weaker demand from Western exchange-traded funds (ETFs) and Indian retail investors has kept sentiment cautious.
For gold, he sees the fair value near $4,100 per ounce. A decline below the $4,000 anounce level could increase selling pressure and push prices towards $3,900 an ounce, while a sustained move above $4,200 an ounce could open the possibility of prices moving towards $4,500.
For silver, prices are expected to remain range-bound between $55 and $63 per ounce, he added.
