MCX Gold and Silver Prices Rise After Recent Volatility

Gold and silver prices rose on the Multi Commodity Exchange (MCX) on September 18, extending their recovery after volatility following the US Federal Reserve's rate decision. MCX October gold was trading at ₹1.53 lakh per 10 grams, up 0.66%, while December silver was at ₹2.41 lakh per kg, higher by 1.20%.

The rebound in global prices is supported by a softer US dollar and easing Treasury yields, which are beneficial for precious metals. However, the outlook remains sensitive to the Fed's interest-rate path, currency movements, crude prices, and geopolitical developments.

Vedika Narvekar from Anand Rathi Share and Stock Brokers attributed the support to cooling Treasury yields after their sharp rise around the Fed's rate hike and a decline in oil prices, which has eased some inflation concerns. She also pointed out that continued inflows into gold ETFs despite volatility support the longer-term investment case for gold.

According to Gaurav Garg from Lemonn, silver is recovering sharply after the recent sell-off as the dollar and US Treasury yields ease. Silver can be more volatile than gold because of its significant industrial use, meaning expectations around economic activity influence its price alongside monetary policy and the dollar.

The movement in the rupee is particularly important for Indian bullion prices because India imports most of its gold and silver. A weaker rupee can cushion the impact of a decline in international bullion prices on MCX, while a stronger rupee can limit domestic gains.