Gold and silver prices experienced significant gains on the Multi Commodity Exchange (MCX) on Tuesday, with both metals trading higher amid strengthening global demand. MCX gold October futures were 0.53% up at ₹1,60,509 per 10 grams, while MCX silver September contracts were 0.71% up at ₹2,41,341 per kg around 9:15 AM. The precious metals rally was supported by a weaker US dollar amid chatter of currency debasement, adding to the safe-haven demand that has driven prices to their highest levels since May. Spot gold price rose 0.73% to $4,636.82 per ounce, after hitting its highest level since May 15 earlier in the session. US gold futures rose 0.27% to $4,693.11 an ounce, while last week, gold prices rallied more than 5% following the US Treasury's announcement of expanded bond buyback operations. Spot gold rose 0.5% to $4,627.42 per ounce as of 0155 GMT, reaching its highest level since 15 May following the more than 5% gain last week.
The precious metals rally gained additional momentum from escalating US-Iran tensions, with US Treasury Secretary Scott Bessent announcing new economic sanctions against Iran while Tehran warned to retaliate by not allowing "a single drop of oil" through the Strait of Hormuz and Persian Gulf. Bessent claimed that the motive behind the actions is to sever Iran's every economic lifeline, stating "We are now entering the endgame. At dawn begins an economic D-Day — the single greatest financial offensive ever marshaled against an adversary." Under President Trump's direction, Bessent launched 'Operation Economic Outcast', described as an 'economic onslaught' targeting five sectors: digital assets, technology, gold, aviation, and shipping. Bessent warned that any country doing business with Tehran would be cut off from the US dollar system, though he neither confirmed nor denied whether China would be in their crosshairs - for context, Beijing imports around 80% of Iran's exported oil. These developments led to a marginal increase in 24-karat and 22-karat gold rates across major Indian cities, with MCX gold futures rising 0.65% to ₹163,870 per 10 grams on August 24. Notably, Iran said it had restarted talks with neighbouring Oman on managing the Strait of Hormuz as it faces heightened economic pressure from US President Donald Trump amid the wider conflict.
The broader trend remains positive for precious metals as ongoing US-Iran developments continue to support safe-haven demand. COMEX gold futures was up 0.46 percent to $4,716.30 per ounce during morning trade on August 26, while silver was up 1.11 percent to $69.44 per ounce. The domestic MCX futures for October contract closed the Tuesday session with 0.09% increase to ₹1,63,029 per 10 grams, and silver for September contract surged 0.08% to ₹2,44,328 per kilogram. The LBMA spot gold price stood at $4,615.45 per ounce in the PM fixing on August 25, while the domestic spot gold on MCX surged towards ₹1,61,657 per 10 grams on Tuesday. Market participants are now positioning themselves ahead of key US inflation data scheduled for release today, August 26, which includes the July Personal Consumption Expenditures (PCE) price index data, the Fed's preferred inflation gauge. Earlier this month, data showed an unexpected decline in US nonfarm payrolls, while consumer inflation came in line with expectations, tempering expectations of a rate hike in September. Traders are pricing in a 60.4% chance that the Fed will leave rates unchanged next month, according to the CME FedWatch Tool, with lower rates supporting gold as a non-yielding asset. The World Gold Council (WGC) reported that gold prices have climbed to the highest in more than three months as the US Treasury's bold intervention in the bond market revived concerns about fiscal policy and its impact on the dollar.
Domestic precious metals prices showed regional variations across major Indian cities, with gold rates ranging from ₹163,130 to ₹163,870 per 10 grams for 24-karat gold. In Delhi, 24-karat gold was priced at ₹163,300 per 10 grams, 22-karat gold at ₹149,692 per 10 grams, and 999 fine silver at ₹246,720 per kg. Mumbai recorded 24-karat gold at ₹163,580 per 10 grams, 22-karat gold at ₹149,948 per 10 grams, and 999 fine silver at ₹247,150 per kg. Bengaluru showed 24-karat gold at ₹163,710 per 10 grams, 22-karat gold at ₹150,068 per 10 grams, and 999 fine silver at ₹247,350 per kg. Kolkata recorded 24-karat gold at ₹163,130 per 10 grams, 22-karat gold at ₹149,536 per 10 grams, and 999 fine silver at ₹246,390 per kg. Hyderabad showed 24-karat gold at ₹163,600 per 10 grams, 22-karat gold at ₹149,967 per 10 grams, and 999 fine silver at ₹247,110 per kg. Chennai recorded 24-karat gold at ₹163,820 per 10 grams, 22-karat gold at ₹150,168 per 10 grams, and 999 fine silver at ₹247,440 per kg. Over the last seven days, the retail price of 24K gold has increased by around ₹3000 per 10 grams, while 22K gold and 18K gold prices have risen by nearly ₹2795 and ₹2290 per 10 grams, respectively. Compared with the prices on August 25 last year, retail gold prices have increased by around 15%.
The precious metals rally was driven by multiple supportive factors affecting market sentiment. As reported by Aspect Bullion & Refinery, softer dollar expectations, safe-haven demand and global interest-rate cues continue to support precious metals. Market participants are now positioning themselves ahead of key US inflation data scheduled for release today, August 26, which includes the July Personal Consumption Expenditures (PCE) price index data, the Fed's preferred inflation gauge. Additionally, the Jackson Hole Symposium this week is expected to influence precious metals trading, as it traditionally attracts significant attention from global investors and policymakers. Markets are also watching Fed Chairman Kevin Warsh's speech on Friday at the central bank's Jackson Hole symposium for important direction. Technical analysis shows MCX gold has immediate resistance at ₹164,500 – ₹165,000, with next resistance at ₹167,000 – ₹167,700, while immediate support is at ₹160,600 – ₹160,000, with next support at ₹158,500 – ₹158,000. The RSI at 76.98 confirms very strong momentum, though the near-vertical run-up leaves the market vulnerable to a sharp pullback. The World Gold Council (WGC) noted that gold prices have witnessed a recovery in recent weeks, supported by softer US economic data and easing bond yields, while Tata Mutual Fund maintains a constructive medium-to-long-term outlook on gold citing continued central bank purchases and portfolio diversification needs.
Market experts are advising a cautious approach to precious metals trading amid current volatility. Darshan Desai, CEO of Aspect Bullion & Refinery, expects gold price to remain well supported amid geopolitical and macroeconomic uncertainties, while silver could see continued interest given its investment and industrial demand. For Indian consumers, a staggered buying approach may be more prudent at current levels rather than chasing sharp rallies, according to Desai. The bias stays strongly constructive above ₹162,000, with a hold needed to extend gains toward ₹165,000, while a slip below ₹162,000 would signal a sharper correction. Investors are also awaiting a speech by Federal Reserve Chair Kevin Warsh later this week for clues on the interest-rate outlook. Prithvi Finmart has recommended buying silver around ₹2,44,000–2,41,000 with a stop loss below ₹2,37,000 and targets of ₹2,49,000–2,52,500, while gold buying was recommended in the ₹1,62,200-1,61,000 range with a stop loss below ₹1,59,800 and targets of ₹1,64,000-1,65,000. Tata Mutual Fund emphasizes that despite short-term fluctuations, gold maintains structural supports including continued central bank purchases and portfolio diversification needs, while silver remains well-positioned to benefit from increasing adoption across electronics, AI-related hardware, renewable energy infrastructure and solar applications.
