Gold and silver prices rose in domestic futures trade on Friday, October 9, tracking gains in international markets as easing US Treasury yields and a weaker dollar supported bullion.
However, inflation concerns and uncertainty over the US Federal Reserve’s interest-rate outlook remain key factors for investors to watch.
On the Multi Commodity Exchange (MCX), December gold futures rose ₹1,690, or 1.13%, to ₹1.51 lakh per 10 grams. December silver futures gained ₹3,626, or 1.64%, to ₹2.24 lakh per kg.
In international markets, gold futures rose 1.43% to $4,191.51 an ounce, while silver futures gained 2.16% to $60.44 an ounce, according to PTI.
Why are gold and silver prices rising?
Easing US Treasury yields and a pullback in the dollar helped support precious metals on Friday. Gold does not pay interest, making it less attractive when bond yields rise and more competitive when yields ease.
Vedika Narvekar, Research Analyst – Commodities and Currencies at Anand Rathi Share and Stock Brokers, said a US auction of 30-year Treasury bonds pushed long-term yields lower from elevated levels, providing relief to gold prices.
She also cited softer oil prices following US President Donald Trump’s comments on postponing a potential attack on Iran and describing talks as productive. Oil prices matter to bullion markets because energy costs can influence inflation expectations and interest-rate decisions.
Investment demand has offered additional support. Narvekar said global gold ETF holdings rose 0.3% during the week, potentially extending their gains to 12 consecutive weeks. Central bank buying has also remained supportive.
Can gold sustain its recovery?
Gold has recovered from the $4,100-an-ounce level, which Narvekar identified as an important support. However, she cautioned that the rally could be short-lived if inflation concerns persist.
She identified immediate resistance at around $4,220 an ounce, equivalent to approximately ₹1,52,000 domestically, and stronger resistance near $4,300 an ounce, or around ₹1,55,400.
US monetary policy will be another important driver.
Justin Khoo, Senior Market Analyst – APAC at VT Markets, said the September Federal Open Market Committee minutes showed that 16 of the 18 officials expected another rate increase in 2026 to prevent inflation from remaining persistently above the Federal Reserve’s 2% target.
However, softer-than-expected personal consumption expenditures inflation and weaker employment data have reduced the likelihood of an immediate October rate hike, Khoo said. The September US consumer price index report, scheduled for October 14, will provide further clues on inflation and the Fed’s next move.
Higher interest rates can weigh on gold by increasing the opportunity cost of holding a non-yielding asset. Investors will therefore be watching inflation data and bond yields to assess whether Friday’s recovery can continue.
What should silver investors watch?
Silver also gained on Friday, but its price movements can be more volatile because the metal is influenced by both investment demand and industrial use.
Vikram Subburaj, CEO of Giottus.com, identified ₹2.19 lakh–₹2.20 lakh per kg as a key support zone and ₹2.24 lakh as the first level silver needed to recover.
Friday’s advance took the contract above that level.
The sharp intraday price swings seen on Thursday (October 8) also underline the risk of volatility. Silver could rebound more sharply during a recovery, but investors should account for the possibility of equally sharp declines.
How could the rupee affect domestic prices?
Indian gold and silver prices depend not only on international rates but also on the rupee-dollar exchange rate. A weaker rupee raises the cost of importing dollar-priced commodities and can amplify domestic price movements.
Gaurav Garg, Head of Research at Lemonn, said rupee weakness was increasing the domestic cost of imported commodities. His October 9 market update also highlighted easing dollar strength as a source of support for precious metals, while noting continued uncertainty in oil markets.
What should investors do?
Friday’s gains alone do not establish that the recent weakness in bullion has ended. For gold, the ability to hold above key support levels and move past the resistance identified by Narvekar will be important. Silver investors should pay particular attention to its support zone and wider price swings.
Those buying physical gold for planned purchases may consider spreading their buying over time instead of basing the decision on a single trading session. Investors using gold and silver ETFs should assess their portfolio allocation, investment horizon and tolerance for volatility.
NOTE TO READERS
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.