On the Multi Commodity Exchange (MCX), gold futures for October delivery rose ₹676, or 0.44%, to ₹1.55 lakh per 10 grams. Silver futures for September delivery gained ₹2,270, or 0.96%, to ₹2.38 lakh per kg.
Globally, gold futures rose around 0.40% to $4,394.01 an ounce, while silver futures gained 1.64% to $65.74 an ounce.
Why are gold and silver prices rising?
A key driver is the changing outlook for US monetary policy.
Recent US inflation, employment and consumer activity data have come in softer, reducing expectations of further tightening by the Federal Reserve. This has weighed on the US dollar and supported gold.
Gold typically benefits when the dollar weakens because the metal becomes cheaper for holders of other currencies. Expectations of lower interest rates can also support gold, as the opportunity cost of holding a non-yielding asset such as gold declines.
“Gold and silver are entering the new week on a firm note, supported by a softer US dollar, shifting rate expectations and continued safe-haven demand,” said Darshan Desai, CEO, Aspect Bullion & Refinery.
What is the India-specific factor?
Domestic prices also reflect currency movements. The rupee weakened to around ₹95.59 per dollar in early trade on Monday (August 17). A weaker rupee can push up the landed cost of internationally priced commodities such as gold and silver, providing additional support to domestic prices.
The rupee has also faced pressure from elevated crude oil prices. WTI crude was trading around $82.83 a barrel, while Brent remained near $89, according to Gaurav Garg, Head of Research at Lemonn.
Garg said gold and silver gained as a weaker dollar and softer economic data reduced expectations of a near-term Fed rate hike. He also pointed to concerns over supply disruptions after US-Iran peace talks stalled and tanker traffic through the Strait of Hormuz declined.
Geopolitics adds to safe-haven demand
Geopolitical uncertainty is another factor supporting bullion.
The lack of progress in US-Iran peace talks and concerns around oil supplies have kept investors cautious. Such uncertainty can increase demand for assets perceived as safe havens, including gold.
“Geopolitical risks and global growth concerns are further supporting bullion,” Desai said.
However, analysts do not expect prices to move in a straight line. After the recent gains, gold and silver could see some consolidation or profit-taking.
What should investors watch next?
For gold, the Federal Reserve’s rate outlook, US dollar, bond yields and geopolitical developments will remain key drivers. Any shift towards a more dovish Fed could support prices, while a renewed inflation shock or a more hawkish policy stance could weigh on bullion.
Ross Maxwell, Global Strategy Operations Lead at VT Markets, said $4,400-$4,450 an ounce is an immediate resistance zone for gold. A sustained move above $4,500 an ounce could strengthen the bullish trend, while he identified $4,150-$4,200 an ounce as an important support area.
For Indian investors, however, global gold and silver prices are only part of the equation. The rupee-dollar exchange rate, international prices and domestic market conditions together determine the direction of MCX prices.
-With agencies inputs
