Gold and Silver Prices Rise in India Amid Festive Season

India's gold and silver prices rose in domestic futures trade on October 1 as markets assessed the outlook for US interest rates. December gold futures traded at ₹1.49 lakh per 10 grams, up 0.51%, while December silver futures were at ₹2.24 lakh per kg, up 0.40%.

The precious metals have been under pressure recently due to higher US Treasury yields and a stronger dollar offsetting support from geopolitical uncertainty and inflation concerns. According to NS Ramaswamy, Head of Commodity at Ventura, gold is currently caught between competing forces, with higher yields increasing the opportunity cost of holding non-yielding assets.

Ramaswamy noted that the Federal Reserve's rate decision and upcoming US payroll data remain important for the near-term direction of gold. He also mentioned that gold has lost some of its rate-cut premium but continues to have structural support from central-bank buying and investment flows into gold ETFs.

The recent correction in prices has brought physical demand into focus as India enters the peak festive and wedding period. Colin Shah, MD, Kama Jewelry, said that festive demand around Dhanteras and Diwali has historically remained relatively resilient due to cultural significance attached to gold purchases.