Gold, Silver Rebound as Crude Oil Prices Fall
The prices of gold and silver rebounded on Wednesday as crude oil prices fell due to an improvement in energy supplies from West Asia and the release of a large tranche from US emergency oil reserves.
Gold futures on the Multi Commodity Exchange (MCX) opened higher, trading near ₹1,49,800 per 10 gram at the time of writing. The benchmark December gold contract opened ₹1,087 higher at ₹1,49,910 per 10 gram.
Silver also gained, with futures opening higher on MCX and trading near ₹2,26,450 per kg. The previous close was ₹2,25,450.
The sharp decline in crude oil prices provided some support to gold and silver, said Vikram Subburaj, chief executive officer of Giottus.com. He noted that recent comments from the Federal Reserve had also provided relief to gold and silver, reducing market expectations of an October interest-rate increase from nearly 70% to around 50%.
However, Ajay Kedia, director of Kedia Advisory, warned that volatility is likely to persist for Indian investors. Movements in the rupee will remain important, as a weaker rupee could provide some support to domestic bullion prices.