On COMEX, gold was trading at $4,152.90 per ounce, up 0.29%, while silver was at $60.645 per ounce, higher by 0.58%, according to data available.
Gold had touched a two-month low in the previous session, while silver also recovered from its recent weakness.
Spot gold was up around 0.4% at $4,127.40 per ounce, while December US gold futures gained 0.3% to $4,150.60. Spot silver was around $60.39 an ounce, up 0.4%.
What is driving gold prices?
The immediate focus for gold remains on the US Federal Reserve’s interest-rate path. Higher interest rates and bond yields tend to weigh on gold because the metal does not provide regular income.
Minutes of the Fed’s latest meeting showed policymakers were divided over the need for further rate increases. Markets currently see an 18% probability of a rate hike later this month, while the probability of an increase in December is around 80%, according to the CME FedWatch tool.
“Gold prices have been affected by US interest rate expectations, Treasury yields, changes in the dollar, geopolitical unrest and profit-taking,” said Anand K Rathi, Co-Founder, MIRA Money.
He said the Fed’s rate trajectory and US 10-year Treasury yields would remain important near-term drivers. A higher-for-longer interest-rate environment could restrict gold’s upside, while softer rate expectations could support prices.
Why does the dollar matter?
The US dollar is another important variable for precious metals. A stronger dollar can put pressure on dollar-denominated gold and silver by making them more expensive for buyers using other currencies.
For Indian investors, currency movements have an additional impact. Domestic gold prices are influenced by both international bullion prices and the rupee-dollar exchange rate. A weaker rupee can therefore support domestic gold prices even when international prices are not rising.
What is supporting gold in the longer term?
Central-bank demand remains an important structural factor for gold.
According to Rathi, China and other emerging-market central banks have been adding gold to their reserves as part of broader reserve diversification. This could continue to support gold’s strategic role over the longer term.
Investor participation has also expanded through financial products such as gold ETFs, which provide exposure to the metal without requiring physical ownership.
How are high gold prices affecting Indian buyers?
The sharp increase in gold prices has changed purchasing patterns in India’s jewellery market.
Amit Modak, Director, PNGS, said consumers are becoming more selective and paying greater attention to design, purity, value and affordability. Lightweight jewellery, versatile designs and exchange programmes are gaining importance as higher prices increase the cost of purchases.
World Gold Council data cited by Modak shows that Indian jewellery demand fell 15% year-on-year to 75.1 tonnes in Q2 2026, while the value of jewellery demand in the first half of 2026 rose 26% to $21 billion.
The trend suggests that consumers are purchasing lower quantities by weight even as the amount spent on gold remains high.
India’s overall gold demand fell 6% year-on-year to 131.4 tonnes in Q2 2026, but its value increased 50% to a record ₹1.98 lakh crore. Bar-and-coin demand rose 9%, while gold ETF demand increased 49%.
Will festive and wedding demand help?
The upcoming festive and wedding season could provide support to jewellery demand. Wedding purchases tend to be relatively resilient because gold remains an important part of gifting and traditional ceremonies.
However, consumers may defer discretionary purchases when prices rise sharply. Modak said greater price stability or periodic corrections could encourage buyers who have postponed purchases to return to the market.
What should investors watch in silver?
Silver has an additional driver that distinguishes it from gold: industrial demand.
Apart from movements in the dollar, interest rates and investor sentiment, silver prices are influenced by the outlook for industrial activity and global economic growth.
This means silver can respond differently from gold during periods of changing economic expectations, even though both metals are affected by broader movements in the precious-metals market.
What should gold and silver investors do now?
With bullion prices remaining volatile, investors should avoid making decisions based solely on short-term price movements.
Rathi said investors should not try to time the market or chase sudden rallies. For those looking to build long-term exposure, a staggered accumulation approach may be more suitable.
He also cautioned that gold should form part of a diversified asset allocation rather than a large concentration in the portfolio.
For the near term, investors should track Fed policy expectations, US Treasury yields and the dollar, while Indian buyers also need to account for rupee movements. For silver, industrial demand adds another factor to the outlook.
-With Reuters inputs