MCX October gold was trading at ₹1.53 lakh per 10 grams, up 0.66%, while December silver was at ₹2.41 lakh per kg, higher by 1.20%.
The recovery in domestic bullion prices comes as global gold and silver prices rebound, with a softer US dollar and easing Treasury yields supporting precious metals. However, the outlook remains sensitive to the Fed’s interest-rate path, currency movements, crude prices and geopolitical developments.
Why gold is recovering
Vedika Narvekar, Research Analyst – Commodities & Currencies at Anand Rathi Share and Stock Brokers, attributed the recent support to cooling Treasury yields after their sharp rise around the Fed’s rate hike and a decline in oil prices, which has eased some inflation concerns.
Narvekar also pointed to continued inflows into gold ETFs despite the volatility of the past two weeks, saying this supports the longer-term investment case for the metal. At the same time, she said the Fed’s guidance for at least one more rate hike this year remains a headwind.
Why silver is moving faster
Gaurav Garg, Head of Research at Lemonn, said both gold and silver were recovering sharply after the recent sell-off as the dollar and US Treasury yields eased. Silver has seen a stronger rebound, he said.
Silver can be more volatile than gold because, besides investment demand, it also has significant industrial use. This means expectations around economic activity can influence its price alongside monetary policy and the dollar.
What the rupee means for MCX prices
The movement in the rupee is particularly important for Indian bullion prices because India imports most of its gold and silver.
The rupee was around ₹95.94 against the US dollar, according to Garg. A weaker rupee can cushion the impact of a decline in international bullion prices on MCX, while a stronger rupee can limit domestic gains.
Vikram Subburaj, CEO of Giottus.com, also highlighted the currency effect, saying domestic prices can behave differently from international prices because of movements in the rupee.
Can festive demand support gold
Physical demand could become another factor as India moves deeper into the festive and wedding season.
Darshan Desai, CEO of Aspect Bullion & Refinery, said the recent correction has brought some buyers back into the market, although consumers remain selective because of elevated prices. He expects physical demand to gradually strengthen, particularly for coins, bars and lighter-weight jewellery, as the festive season gathers momentum.
Desai said gold prices will continue to respond to interest-rate expectations, the US dollar, crude oil prices and geopolitical developments.
What investors should watch
For Indian investors, the recent MCX recovery reflects a combination of global and domestic factors rather than a single trigger. Fed guidance and US yields remain important for the international price, while the rupee can amplify or moderate those moves in India.
Garg said softer crude and a stable rupee currently provide some relief for Indian commodities, although Fed policy, the dollar and geopolitical developments remain key drivers.
Subburaj said the sharp rebound should be viewed in the context of elevated volatility. For long-term allocations, he suggested staggered buying as a way to manage price fluctuations, while traders using leverage should account for the higher financial exposure involved in futures.
