India's Gold and Silver Prices Surge Amid RBI Rate Decision

Gold and silver prices surged on August 5 as investors welcomed the Reserve Bank of India's decision to keep the repo rate unchanged at 5.25%. The move, aimed at assessing inflationary impact from elevated energy prices, reflected a balanced approach by the central bank.

Gaurav Garg, Head of Research at Lemonn Markets Desk, said gold continued to attract safe-haven buying due to fresh geopolitical uncertainty. Optimism over a possible agreement to reopen the Strait of Hormuz helped ease supply concerns and reduce inflationary pressures, leading to softer crude oil prices.

Silver also traded firmly, rising on supportive global cues and stronger-than-expected US manufacturing data. The white metal's price extended gains amid firm global cues, renewed investor interest, and a softer US dollar. On the Multi Commodity Exchange (MCX), gold futures for October delivery climbed 1.5%, while silver futures rose 1.23%.

The Reserve Bank of India's decision to maintain the policy rate marked the fourth consecutive monetary policy review where the rate remained unchanged. Investors are now closely watching upcoming US macroeconomic data, including the ADP employment report and the US non-farm payrolls data, which will provide further guidance on the Federal Reserve's interest rate path.