Gold and silver prices rose on the Multi Commodity Exchange (MCX) on Monday, October 19, tracking gains in international markets as investors assessed the outlook for US interest rates and the impact of softer oil prices on inflation.
MCX gold futures for December delivery were trading at ₹1.48 lakh per 10 grams, up 0.24%, while December silver futures gained 0.43% to ₹2.12 lakh per kg.
In the international market, spot gold rose 0.3% to $4,175.60 per ounce, while spot silver gained 0.9% to $57.54 per ounce, according to Reuters data.
Why are gold and silver prices rising?
Lower oil prices supported bullion by easing some concerns about inflation and the possibility of higher interest rates. However, the outlook for US monetary policy remains a key factor influencing precious metal prices.
Gold does not generate interest income, making it less attractive when interest rates rise. Expectations of higher rates can therefore put pressure on gold, even when geopolitical uncertainty supports demand for safe-haven assets.
Vikram Subburaj, CEO of Giottus.com, said lower energy prices were easing inflation concerns but added that the interest-rate outlook remained an obstacle to a sustained recovery in bullion prices.
What does this mean for Indian gold and silver buyers?
For Indian buyers, domestic bullion prices depend on international gold and silver rates, the rupee’s exchange rate against the US dollar, import costs and domestic taxes. A rise in international prices can push up domestic rates, although currency movements can amplify or offset the impact.
Festive and wedding demand could provide support to the domestic bullion market. However, elevated prices may make buyers more selective about the quantity and timing of purchases.
Darshan Desai, CEO of Aspect Bullion & Refinery, said buyers remained price-conscious at elevated levels and that festive and wedding demand was likely to support the market, although purchases could remain selective.
He added that currency movements, US inflation data and interest-rate expectations would remain important drivers of bullion prices in the coming week.
Should buyers expect prices to keep rising?
Monday’s gains alone do not establish a sustained upward trend. Bullion prices remain sensitive to changes in the US dollar, bond yields, inflation expectations and interest-rate signals.
According to Reuters, traders were pricing in a 92% probability of a US Federal Reserve rate hike in December, based on the CME FedWatch Tool. Expectations of higher rates could weigh on gold and silver, while a weaker dollar and easing yields could support prices.
For those planning jewellery purchases, comparing prevailing local rates and making charges across jewellers can help assess the overall cost. Those buying gold or silver as investments should account for price volatility and avoid assuming that a short-term recovery will continue.
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.