On the Multi Commodity Exchange (MCX), gold futures for October delivery rose ₹1,272, or 0.85%, to ₹1.50 lakh per 10 grams. Trading volumes stood at 1,283 lots.
Analysts attributed the rise to fresh positions built by market participants.
Globally, gold futures rose 1.13% to $4,287.50 an ounce in New York.
Silver also moved higher. MCX silver futures for September delivery gained ₹5,496, or 2.43%, to ₹2.31 lakh per kg, with 2,943 lots changing hands. In the international market, silver futures rose 3.44% to $61.66 an ounce.
Why are gold and silver rising?
The recent rally in precious metals has been supported by a combination of lower US Treasury yields, expectations of easing inflation pressures, a softer dollar and continued demand for precious metals.
Gold has gained sharply over the week.
Karthick Jonagadla, smallcase manager and MD & CEO of Quantace Research, said COMEX gold futures had risen from around $4,090 an ounce on August 3 to around $4,350 on August 7.
He attributed the move partly to a repricing of inflation risks. Brent crude has fallen from around $90.12 a barrel on July 31 to about $83.3, while the US 10-year Treasury yield has also moved lower from recent levels, although yields have since recovered somewhat.
Gold typically benefits when bond yields fall because the opportunity cost of holding a non-yielding asset such as gold declines. A weaker dollar can also make dollar-denominated gold cheaper for buyers holding other currencies.
US jobs data now in focus
Investors are also watching US economic data for clues on the Federal Reserve’s next policy move. A weaker labour market could strengthen expectations of lower interest rates, which would generally be supportive for gold.
Justin Khoo, Senior Market Analyst – APAC at VT Markets, said gold’s recent rally was driven by a combination of falling oil prices, weaker US labour market data, lower Treasury yields and changes in geopolitical risk, rather than safe-haven demand alone.
Gold futures had recently climbed above $4,300 an ounce, while silver also moved to multi-week highs.
The next major trigger for global precious metals could be the US non-farm payrolls report. A softer jobs reading could reinforce expectations of monetary easing, while stronger-than-expected data could push yields and the dollar higher and weigh on gold.
What could happen next?
Jonagadla said the $4,300 level is an important test for gold. A sustained move above it could keep the metal in the $4,350-$4,400 range, while a fall below $4,200 could indicate profit-taking.
For Indian investors, however, international gold prices are only one part of the equation. The rupee-dollar exchange rate, import-related costs and domestic demand also influence local gold prices.
With the rupee around ₹95.22 against the US dollar, currency movements can amplify or offset changes in international bullion prices.
Silver is likely to remain sensitive to both investment demand and industrial expectations. Its sharper move on Friday (August 7) compared with gold reflects the higher volatility typically associated with the white metal.
-With agencies inputs
