Volatility in Bullion Markets: Gold, Silver Prices React to Shifting US Rate Expectations

Gold and silver prices rose slightly in futures trade on September 25, influenced by changing expectations around US interest rates, a stronger dollar, and elevated Treasury yields. On the Multi Commodity Exchange (MCX), gold contracts gained ₹150 to ₹1.50 lakh per 10 grams, while silver futures increased ₹368 to ₹2.33 lakh per kg.

Gaurav Garg of Lemonn Research attributed this volatility to a stronger dollar and US Treasury yields above 5 percent, which reduces the appeal of non-yielding assets like gold and silver. Vikram Subburaj, CEO of Giottus.com, added that higher US yields and interest rates are key factors weighing on precious metals.

The Indian rupee also plays a crucial role in domestic gold prices, with a weaker rupee potentially cushioning price declines but increasing import costs for precious metals. Physical demand remains steady but cautious, with buyers at current high price levels becoming more selective and waiting to see how prices move.