MCX gold futures for October delivery were trading 0.66% higher at ₹1.54 lakh per 10 grams, while September silver futures rose 1.50% to ₹2.39 lakh per kilogram.
The gains in domestic bullion markets came as global gold and silver prices moved higher. Gold remained supported by safe-haven demand amid renewed geopolitical tensions, while silver received additional support from its industrial-demand outlook.
What is supporting gold prices?
Gold has remained in focus as investors assess geopolitical risks and await the latest US inflation data for clues on the Federal Reserve’s interest-rate path.
Fresh tensions involving shipping in and around the West Asia have pushed oil prices higher, adding to uncertainty in global markets. Brent crude moved towards $90 a barrel, while US crude traded above $83 a barrel.
Gold often attracts demand during periods of geopolitical and economic uncertainty as investors use the metal as a store of value and portfolio diversifier.
The US consumer price index data due later on Wednesday (August 12) will be closely watched for its potential impact on expectations around US monetary policy. A softer inflation reading could strengthen expectations of easier monetary conditions, while a stronger-than-expected reading could support a more cautious rate outlook.
Silver gains more than gold
Silver has outperformed gold in Wednesday’s (August 12’s) domestic trade, with MCX September futures gaining 1.50%.
The white metal has a dual demand profile, with investment demand supplemented by its use across industrial applications. This gives silver an additional demand driver beyond the safe-haven factors supporting gold.
“Gold and silver continue to remain firmly supported, reflecting strong investor confidence in precious metals,” said Darshan Desai, CEO, Aspect Bullion & Refinery.
According to Desai, physical demand for both metals remains healthy despite elevated prices. He said silver has also gained momentum from investment interest and sustained industrial demand.
At the same time, Desai cautioned that some near-term consolidation and profit-booking cannot be ruled out after the sharp rally in bullion prices.
Gold, silver ETF flows remain positive but moderate
Investment flows through exchange-traded funds have also remained supportive, although the pace has moderated.
According to July data cited by Mirae Asset Investment Managers, gold and silver ETFs continued to see positive flows, while silver ETF inflows stood at around ₹1,285 crore in July, down from ₹4,286 crore in June.
The moderation suggests that investment demand has not disappeared, but the pace of fresh allocations has eased from the previous month.
For Indian investors, the combination of elevated domestic prices, global geopolitical developments, oil prices and changing expectations around US interest rates will remain important for bullion prices in the near term.
-With agencies inputs
