Gold and silver prices rose in international markets on Monday, October 12, as investors awaited US inflation data and further signals on the Federal Reserve’s interest rate outlook.
On COMEX, gold futures were trading at $4,229.80 per ounce, up $13.50, or 0.32%, from the previous close of $4,216.30. Silver futures gained $0.437, or 0.72%, to $61.485 per ounce, according to data available at the time of writing.
The US consumer price index (CPI), producer price data and retail sales figures due this week will offer cues on inflation and the health of the economy. Higher energy costs could push inflation up, potentially influencing the Federal Reserve’s decision on interest rates.
Gold, which does not offer interest income, can face pressure when interest rates rise as investors find yield-bearing assets more attractive. However, a weaker dollar and lower bond yields can support demand for the metal.
What is driving gold and silver prices?
Gold futures for December delivery on COMEX gained 1.3% last week to close at $4,216.30 per ounce, while silver rose more than 1% to $61.05 per ounce, according to the data provided.
The recovery followed a softer US dollar and a pullback in Treasury yields. Silver also drew support from gains in industrial metals such as copper and zinc.
However, expectations of tighter monetary policy could limit further gains. Markets are assessing whether persistent inflation will prompt the Federal Reserve to raise rates in October or defer a possible increase until December. Geopolitical tensions and crude oil price movements remain additional factors influencing market sentiment.
Will domestic gold and silver prices follow global trends?
Movements in the rupee will be an important factor for Indian bullion prices. A weaker rupee increases the cost of imported gold and silver, potentially limiting the impact of a decline in international prices. Rupee appreciation, in contrast, can moderate the effect of global price gains.
Jateen Trivedi, vice-president and research analyst for commodity and currency at LKP Securities, expects gold and silver prices to remain range-bound with a mildly positive bias, supported by rupee weakness.
He said investors would track inflation data from India, China and the US, trade data from China, and speeches by Federal Reserve officials for further cues.
On the Multi Commodity Exchange (MCX), gold futures for December delivery gained ₹1,109, or nearly 1%, last week to settle at around ₹1.51 lakh per 10 grams. Silver futures ended marginally lower by ₹122 at around ₹2.25 lakh per kilogram.
What should investors watch?
The US inflation readings and the Federal Reserve’s policy signals will be key near-term triggers for international bullion prices. For domestic buyers and investors, the rupee’s movement will also influence how global price changes translate into Indian market rates.
Trivedi’s assessment points to a range-bound market with a mildly positive bias, rather than a sustained upward or downward move.
-With agencies 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.