On the Multi Commodity Exchange (MCX), gold futures were trading at ₹1,61,405 per 10g as of 3:55 pm, while silver futures were trading at ₹2,46,400 per kg, according to the latest data available on the exchange’s website. The prices refer to the October 5 gold and September 4 silver futures contracts, respectively.
The rally comes as international gold prices climbed to a near three-month high, putting the metal on track for its third straight weekly gain. Back in January this year, gold had hit a record of around ₹1.8 lakh per 10g, with silver surging to ₹4.25 lakh per kg in India.
Why are gold and silver rising?
A mix of a weaker US dollar, US Treasury yield movements, safe-haven demand and US monetary policy expectations has propped up bullion prices. According to Choice Broking’s Pinky Yadav, MCX prices opened higher in line with gains on COMEX, with US Treasury bond buybacks and rising national debt fuelling volatility.
She also flagged that rising oil prices—linked to upcoming US sanctions on Iran—have stoked inflation worries, while dollar weakness has lent further support to precious metals.
Weaker dollar supports bullion
The US dollar has been a key driver here. The dollar index was hovering around 98.8 and headed for a weekly decline.
Since gold and silver are priced in dollars internationally, a softer greenback makes them cheaper for buyers holding other currencies, which can boost demand and lift prices.
GoldSilver Central’s Brian Lan noted, according to Reuters, that dollar weakness has supported precious metals broadly, alongside a notable shift in yields.
Treasury buybacks add uncertainty
US Treasury debt management is another factor markets are watching closely.
Treasury Secretary Scott Bessent hinted the government could increase repurchases of Treasury securities further, having already flagged plans to double buybacks of longer-dated debt to at least $4 billion per operation next quarter.
This has stirred market volatility and put fresh focus on yields, rates and the broader debt picture.
OCBC’s Christopher Wong told Reuters that attention will now turn to whether the move has legs, with US data and the Jackson Hole Symposium from August 27-29 likely to steer the dollar and yields next.
Fed rate outlook still key
Fed rate expectations remain central to gold’s outlook. Markets are pricing in a 67% chance that the Fed holds rates steady next month, versus 33% for a hike, according to the CME FedWatch tool.
Since gold pays no interest or dividends, higher rates typically dull its appeal compared with interest-bearing assets. But policy uncertainty, combined with moves in yields and the dollar, can still boost gold’s safe-haven appeal.
Geopolitics boosting safe-haven demand
Geopolitical risk is adding support too. Bessent said the US would impose its toughest-ever sanctions on Iran, and worries about the knock-on effect on oil supply have pushed crude higher, adding to inflation concerns.
Such uncertainty tends to push investors towards safe havens like gold. Yadav added that capital has moved into safe-haven metals, backed by strong investment demand and continued Chinese central bank buying.
Central bank buying still a pillar
Sustained central bank demand remains a major structural support for gold as countries diversify their reserves.
Yadav also pointed to July’s inflows into global gold ETFs, alongside ongoing central bank purchases, as additional demand drivers beyond jewellery and retail investment.
Silver rides the rally too
Silver has joined the broader rally, with international spot prices up 1.8% to around $69.31 an ounce. Platinum rose 2.6% to $1,875.75 and palladium gained 1.7% to $1,356.59.
Silver responds to many of the same macro drivers as gold—including dollar weakness and shifting rate expectations—but its industrial demand can also cause it to move independently.
The latest rally has taken MCX silver to ₹2,46,400 per kg, putting the ₹2.50 lakh mark within touching distance.
What’s next for gold and silver?
Near-term direction will likely hinge on the dollar, Treasury yields, incoming US data and Fed signals, with Jackson Hole a key watch point.
For Indian investors, the rupee-dollar rate matters too—a weaker rupee makes dollar-priced commodities costlier domestically even if global prices hold steady.
The rally has already dented some physical demand in India, as higher prices put off retail buyers, while demand in China has stayed comparatively steady.
With MCX gold at ₹1,61,405 per 10g and silver at ₹2,46,400 per kg, the question now is whether these global tailwinds can keep the rally going—or trigger a fresh bout of profit-taking at elevated levels.
