On the Multi Commodity Exchange (MCX), gold futures for the October contract rose ₹2,165, or 1.5%, to ₹1.46 lakh per 10 grams. Silver futures for September delivery gained ₹4,320, or 1.95%, to ₹2.25 lakh per kg.
In global markets, Comex gold futures for December delivery climbed nearly 2% to $4,226.50 per ounce, while silver futures rose 3.21% to $61.46 per ounce.
What is driving gold and silver prices?
Analysts attributed the rally to increased demand for precious metals amid geopolitical developments, a softer US dollar and changing expectations around global monetary policy.
“Gold extended their gains for the second straight session as investors increased safe-haven buying following renewed geopolitical uncertainty and a weaker US dollar,” said Gaurav Garg, Head of Research at Lemonn Markets Desk.
Silver also benefited from fresh positions taken by market participants, analysts said.
According to Pinky Yadav, Commodity Fundamental Analyst at Choice Broking, bullion prices gained after reports of progress in talks to reopen the Strait of Hormuz eased concerns over energy supply disruptions and pushed crude oil prices lower.
Lower crude prices can reduce inflationary pressures, influencing investor expectations around interest rates and supporting demand for precious metals.
RBI policy decision and its impact
The rally coincided with the Reserve Bank of India’s decision to keep the benchmark repo rate unchanged at 5.25% for the fourth consecutive policy meeting.
Ajitabh Bharti, Co-founder and Executive Director at CapitalXB, said the RBI’s decision to maintain the status quo reflects a balance between supporting economic growth and monitoring inflation risks.
“While the ongoing US-Iran war continues to cast a shadow over the global inflation outlook, the RBI is likely to remain focused on supporting growth while monitoring inflation carefully,” Bharti said.
What does the rise mean for Indian consumers?
The increase in bullion prices comes ahead of the festive season, when gold demand typically picks up in India. Higher prices could influence jewellery buying decisions, particularly for consumers making discretionary purchases.
Colin Shah, Managing Director at Kama Jewelry, said global uncertainties and changing economic conditions could make consumers more cautious.
“Individuals are becoming cautious given the unpredictable economic weather conditions. As we head into the festive season, the impact of this will be slightly visible in domestic demand, especially when it comes to buying gold,” Shah said.
However, he added that gold’s traditional role as a store of value could continue to support long-term demand.
Gold, silver price outlook
Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions and President of India Bullion and Jewellers Association, said gold holding above $4,200 per ounce could open the possibility of a move towards $4,500 per ounce.
In domestic terms, this could push gold prices towards around ₹1.55 lakh per 10 grams, he said.
For silver, a sustained move above $63 per ounce could take prices towards the $70-$71 an ounce range, equivalent to around ₹2.50-2.55 lakh per kg.
Darshan Desai, CEO of Aspect Bullion & Refinery, said continued central bank buying, inflation concerns and global uncertainties could remain key factors supporting gold demand.
“While short-term price volatility is inevitable, the underlying fundamentals remain strong, and we continue to see a positive medium- to long-term outlook for gold as a safe-haven asset and an effective hedge against inflation,” Desai said.
For investors, experts advise looking at gold and silver as part of portfolio diversification rather than relying on short-term price movements. Jewellery buyers should also consider factors such as purity, making charges and overall cost before purchasing.
