Gold and silver prices rose in international markets on Thursday (October 15), recovering from recent losses as investors assessed the outlook for US interest rates after inflation data came in higher than expected.
On COMEX, gold futures rose $57.20, or 1.39%, to $4,165.10 per ounce, while silver futures gained $0.438, or 0.78%, to $56.315 per ounce, according to the latest available market data on October 15.
The gains came after US consumer price inflation accelerated more than expected in September, raising concerns that the Federal Reserve could keep monetary policy tighter for longer or consider an interest rate hike.
Expectations of higher interest rates generally weigh on non-yielding assets such as gold and silver by increasing the opportunity cost of holding them.
US equities fell for a third consecutive session overnight, with the S&P 500 declining 1.1% and the Nasdaq Composite losing 1.9%, as investors reassessed the implications of higher inflation and borrowing costs.
Market participants are now tracking further US economic data, including producer price inflation and retail sales, along with comments from Federal Reserve officials, for clues on the central bank’s next policy move.
What should Indian investors watch?
For Indian investors, domestic gold and silver prices depend not only on international bullion rates but also on the rupee-dollar exchange rate, import costs, taxes and local demand.
On Wednesday, October 14, gold prices in New Delhi fell by ₹1,800 to ₹1.50 lakh per 10 grams, inclusive of all taxes, according to the All India Sarafa Association.
Silver prices declined by ₹5,000 to ₹2.21 lakh per kilogram.
The rupee’s appreciation against the US dollar added to the pressure on domestic bullion prices, as a stronger rupee reduces the cost of importing dollar-denominated commodities, all else being equal.
The latest gains in international gold and silver prices could provide some support to domestic bullion rates. However, the direction of the dollar, expectations for US interest rates and movements in the rupee will remain important factors to watch.
For investors, short-term price movements may remain volatile as markets respond to inflation data and changing expectations around the Federal Reserve’s policy path.
-With Reuters inputs
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.