SMAR Daily Industry News

MCX Gold and Silver Prices Shift Amid US Rate Hike Bets

Domestic precious metal markets are experiencing volatility as traders react to shifting US economic data and geopolitical tensions. On the Multi Commodity Exchange (MCX), silver futures for December 2026 delivery recorded a decline of Rs 2,000, settling at Rs 1,77,784 per kg. Meanwhile, gold futures for the same delivery period saw a marginal decrease, trading at Rs 1,30,300 per 10 grams.

The market movement follows reports of a robust US labor market, with September job openings rising sharply and layoffs hitting their lowest level in 1-1/2 years. This resilience has increased expectations that the Federal Reserve may have more flexibility to raise interest rates to combat inflation, a sentiment reinforced by the CME's FedWatch tool, which currently prices in a 78% probability of a rate hike in December. However, some inflationary concerns have been tempered by a decline in oil prices, which has supported demand for non-yielding assets like gold.

International spot gold prices dipped 0.3% to $3,948.75 per ounce, while US gold futures for December delivery rose 0.1% to $3,943.20. Spot silver also saw a slight decline of 0.2% to $49.67 per ounce. Other precious metals showed mixed results, with platinum gaining 0.3% to $1,422.15 and palladium advancing 0.5% to $938.49.

Physical gold markets across India reported varying prices. In Delhi, standard 22-carat gold is priced at Rs 1,02,528 per 8 grams, with pure 24-carat gold at Rs 1,11,840 per 8 grams. In Mumbai, Chennai, and Hyderabad, standard 22-carat gold stands at Rs 1,02,408 per 8 grams, while pure 24-carat gold is priced at Rs 1,11,720 per 8 grams.

Manoj Kumar Jain of Prithvi Finmart suggests that while long-term investors might consider accumulating gold and silver via systematic investment plans (SIPs) during market dips, traders should exercise caution. Potential volatility is expected this week due to fluctuations in crude oil prices, dollar index movements, and the upcoming US midterm elections. Any positive developments in US-Iran peace talks could potentially boost bullion prices.

For investors, the current environment underscores the sensitivity of precious metals to US monetary policy and geopolitical stability, suggesting that monitoring Federal Reserve signals and election-related market reactions is essential for short-term trading strategies.

Why it matters

The interplay between strong US labor data and potential Federal Reserve interest rate hikes creates significant price volatility for gold and silver, impacting investment strategies for bullion holders.

FAQ

What is the current probability of a Fed rate hike in December?
According to the CME's FedWatch tool, traders are pricing in a 78% probability of a rate hike.

How did US labor market data influence recent market sentiment?
US job openings rose in September and layoffs declined to their lowest level in 1-1/2 years, signaling a strong labor market that gives the Federal Reserve more room to raise interest rates.

What advice does Manoj Kumar Jain offer to investors?
He suggests that long-term investors accumulate gold and silver through systematic investment plans (SIPs) during market declines, but advises traders to remain cautious ahead of the US midterm elections.

Source: Economic Times Markets. See the original source for full details.