On MCX, October gold futures were up 0.28% at ₹1.52 lakh per 10 grams, while September silver futures gained 1.14% to ₹2.34 lakh per kg.
The domestic gains come even as gold prices softened in international markets. Spot gold was down 0.5% at $4,322.28 an ounce in early trade, while US gold futures fell 0.4% to $4,381.60. Gold had touched a seven-week high in the previous session after weaker-than-expected US jobs data.
Why gold remains supported
The recent US labour-market weakness has strengthened expectations that the Federal Reserve could keep interest rates lower. Lower rates typically support gold because bullion does not generate interest income, making it relatively more attractive when yields fall.
Markets have also sharply reassessed the chances of a September rate move after US data showed the economy unexpectedly lost jobs in July, while earlier job gains were revised lower.
The next major trigger will be US inflation data. The Consumer Price Index (CPI) is due on Wednesday, followed by the Producer Price Index (PPI) on Thursday. Softer inflation could strengthen expectations of easier monetary policy and provide further support to bullion.
Geopolitics remains another key trigger
Gold is also drawing support from continued geopolitical uncertainty. Developments involving Iran and the Strait of Hormuz remain on investors’ radar, particularly because any escalation could push oil prices higher.
Higher oil prices could, however, create a mixed environment for gold. While geopolitical tensions can increase demand for gold as a safe-haven asset, a sustained rise in energy prices could also raise inflation concerns and complicate the outlook for US interest rates.
Darshan Desai, CEO of Aspect Bullion & Refinery, said gold remains well supported after recently touching a seven-week high, although some profit-taking could emerge alongside a stronger US dollar.
He said investors continue to view gold as a store of value amid economic and geopolitical uncertainty, while US inflation data could influence expectations for interest rates and the direction of precious metals.
