MCX Gold Dips, Silver Rises Amid Rate Hikes, Crude Swings
India's Multi Commodity Exchange (MCX) saw gold October futures dip 0.08% and silver December futures rise 0.49% today, influenced by global crude prices.
India's Commodity Market Swings
On India's Multi Commodity Exchange (MCX) today, gold October futures declined by 0.08% to ₹1,52,861 per 10 grams. Silver December futures, however, gained 0.49%, trading at ₹2,39,380 per kilogram. This volatility emerged amid fluctuating global crude prices and recent central bank tightening.
Market sentiment also reflected economic uncertainties stemming from reports of US-Iran tensions, according to Mint Markets, which kept investors cautious.
Global Monetary Tightening
Major central banks have tightened monetary policy this month. The US Federal Reserve raised interest rates by 25 basis points (bps) on 16 September. The European Central Bank (ECB) also increased its key deposit rate by 25 bps. Meanwhile, the Bank of Japan (BoJ) lifted its rates to a 31-year high of 1.25%.
The Bank of England, however, maintained its current interest rate levels. Gold, a non-yielding asset, typically sees downward pressure during periods of monetary tightening.
Crude and Currency Movements
International crude oil benchmark Brent Crude declined by 1% today, trading below $104 per barrel. This fall in oil prices generally provides some support for precious metals. The US dollar remained flat today, although it is poised to conclude the week with a gain exceeding 1%.
A stronger dollar can weigh on the price of gold, making the yellow metal more expensive for holders of other currencies. US gold futures for December delivery cooled by 0.10% to $4,380.95 per troy ounce.
Manoj Kumar Jain of Prithvifinmart Commodity Research identified MCX gold support levels at ₹1,51,650 and ₹1,50,500, with resistance at ₹1,53,800 and ₹1,55,000. For silver, support sits at ₹2,36,000 and ₹2,33,300, and resistance at ₹2,40,400 and ₹2,43,000. Jain advised traders to book profits on long gold and silver positions during price rallies.
Ravi Singh, Chief Research Officer at Master Capital Services, noted MCX gold's recovery from ₹1,49,600 but maintained a cautious outlook, with immediate resistance at ₹1,57,081. Geopolitical tensions, such as those reported between the US and Iran, could fuel inflation across the region, potentially prompting Asian central banks to consider further rate hikes. This would affect borrowing costs and investment flows in markets like India.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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