Gold and silver prices surged on Friday, October 9, in international markets. A weaker US dollar and lower US Treasury yields boosted demand for these precious metals. December gold futures on the COMEX climbed to $4,197.10 per ounce, up $40.10 or 0.96% from the previous close. Silver futures also rose to $60.395 per ounce, a 1.63% increase.
The gains were driven by a pause in the US dollar's rally, making gold and silver more affordable for investors using other currencies. The decline in the benchmark 10-year US Treasury yield for a second straight session also supported the rise in precious metals. Gold, which does not pay interest, benefits from lower yields as it reduces the opportunity cost of holding the metal.
However, the outlook remains uncertain. Inflation concerns and expectations of further monetary tightening by the US Federal Reserve could limit the gains. Higher oil prices and supply disruptions in West Asia have added to these concerns. While gold is traditionally seen as a hedge against inflation, persistently high interest rates could weigh on its appeal.
The US Federal Reserve's interest-rate outlook remains a key factor for precious metals. St. Louis Fed President Alberto Musalem suggested that further rate hikes might be necessary to control inflation, although no specific action was outlined for the upcoming meeting. Traders are pricing in an 18% chance of a rate hike in October and an 82% chance in December.
Geopolitical developments, particularly in West Asia, could also impact safe-haven demand for gold. Any escalation in tensions could support gold prices, while signs of easing tensions might reduce that support. For Indian investors, international bullion prices, movements in the US dollar, Treasury yields, and the rupee will be important factors to track.