Gold prices rose for the third consecutive day as declining crude oil prices and a drop in global bond yields bolstered sentiment. MCX gold for October delivery advanced another ₹1,620 per 10 grams to hit a day's high of ₹1,54,600, taking its three-day cumulative gain to ₹3,791. The rally has also put bullion on track to post its second consecutive weekly gain. The recent gains have narrowed gold's September losses to just 0.27%. The precious metal has also recovered ₹4,335 from its monthly low of ₹1,49,665, highlighting the strength of the recent rebound. The yellow metal had initially reacted negatively to the US Federal Reserve's 25-basis-point rate hike on Wednesday, with policymakers signalling the possibility of further tightening. However, gold subsequently found relief from falling oil prices, which triggered renewed hopes that inflation could remain under control.
The US Federal Reserve raised interest rates by 25 basis points as widely expected, with policymakers seeing little evidence of a meaningful slowdown in inflation. This development has reinforced market expectations for continued monetary tightening, with traders maintaining a 90% chance of further rate hikes ahead of the decision. The Fed raised the benchmark overnight interest rate by a quarter of a percentage point to the 3.75%-4.00% range, with the Federal Open Market Committee voting unanimously to increase the benchmark federal funds rate. The Fed's dot plot for rate projections showed another rate increase by the end of 2026, signaling that the Fed will keep policy tight to bring inflation back to its 2% target. The Fed's median rate outlook for end-2026 moved up to 4.1% from 3.8%, indicating that markets may have to factor in the possibility of further rate increases. The Fed's updated quarterly economic projections showed that 16 of its 18 policymakers expect at least one more quarter-percentage-point rate increase by the end of this year. The Fed's decision came as new U.S. central bank chief Kevin Warsh joined a unanimous decision that effectively acknowledges the Trump administration's inability so far to control inflation that policymakers worry could worsen.
Gold futures opened lower but recovered strongly during Friday's session. On the MCX, the benchmark October gold contract opened ₹731 lower at ₹1,52,250 per 10 gram, but at the time of writing, the contract was trading ₹69 higher at ₹1,53,050. It touched an intraday high of ₹1,53,105 and a low of ₹1,52,171. Gold futures had touched a high of ₹1,80,779 per 10 gram earlier this year. Silver futures opened higher and maintained strength throughout the session. On the MCX, the benchmark December silver contract opened ₹273 higher at ₹2,38,478 per kg, and at the time of writing, the contract was trading ₹1,044 higher at ₹2,39,249. It touched an intraday high of ₹2,39,970 and a low of ₹2,38,173. Silver futures had touched a high of ₹4,20,048 per kg earlier this year. Other precious metals also moved higher, with spot silver rising 1.4% to $63.83 an ounce, platinum gaining 1.6% to $1,780.55 and palladium climbing 2% to $1,295.00.
In the international market, gold futures were trading lower while silver futures were trading higher. On Comex, gold opened at $4,381.60 per ounce, the previous closing price was $4,399.70, and at the time of writing, it was trading $3.20 lower at $4,396.50 per ounce. Gold prices had touched a high of $5,586.20 per ounce earlier this year. Comex silver futures opened at $65.76 per ounce, the previous closing price was $66.09, and at the time of writing, silver was trading $0.50 higher at $66.59 per ounce. Silver prices had touched a high of $121.79 per ounce earlier this year. The precious metals faced significant headwinds from the US dollar strengthening after Federal Reserve policymakers signalled another interest-rate increase later this year. The Bloomberg Dollar Spot Index gained 0.3%, extending its advance to a third consecutive day - the strongest three-day rally for the index since June. A stronger dollar makes greenback-priced gold more expensive for holders of other currencies, while elevated oil prices add to price pressures.
Crude oil prices declined on Thursday (September 17), extending the previous session's losses following reports that Saudi Arabia is offering additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman's Sohar port. Brent crude was around $103.77 a barrel, while WTI was near $100.88 early Friday (September 18), with both benchmarks down about 1%. Both contracts had fallen about $3 on Wednesday (September 16). The decline followed reports that Saudi Arabia is offering additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman's Sohar port. The development has eased some concerns about supply disruptions following attacks on Saudi Arabia's East-West pipeline. The decline in oil prices can reduce some of the inflation pressure that had been weighing on markets. However, geopolitical risks remain as the conflict in the West Asia continues to threaten energy supplies. Oil prices have taken center stage as escalating US-Iran tensions and Saudi supply disruptions pushed Brent above $108 a barrel, the highest since July. Saudi Arabia's East-West pipeline remained offline after attacks, loadings at Yanbu port were suspended, and vessel traffic through the Strait of Hormuz fell sharply, keeping oil, and by extension inflation expectations, elevated even as some Wednesday relief emerged from a surprise US crude inventory build.
On the MCX, gold has support at ₹1,51,000-1,49,650 and resistance at ₹1,53,300-1,54,400, while silver has support at ₹2,32,000-2,29,100 and resistance at ₹2,37,000-2,40,000. Jain said long-term investors can accumulate gold and silver during the current market fall, while traders should wait for the outcome of tomorrow's BOJ policy meeting before taking fresh positions in the two precious metals. Gold prices in physical markets also declined, with standard gold (22 carat) prices in Delhi at ₹1,12,648/8 grams and pure gold (24 carat) at ₹1,22,880/8 grams. In Mumbai, Chennai and Hyderabad, standard gold prices stood at ₹1,12,528/8 grams, while pure gold prices were ₹1,22,760/8 grams across all major cities. For Indian investors, the international price of gold and silver, the rupee-dollar exchange rate and domestic demand conditions therefore need to be considered together rather than looking at global bullion prices alone. Vikram Subburaj, CEO of Giottus.com, said the important point for Indian investors is that the recent correction has been followed by a strong recovery, but volatility is still elevated. The Fed raised its policy rate to 3.75%-4.00% on September 16, and expectations of another hike remain in focus. The US 10-year Treasury yield remains close to 5%, while Brent crude is above $100 a barrel. These factors can quickly change the direction of bullion. Analysts remain cautious about chasing prices at current levels, pointing to continued uncertainty around global interest rates and bond yields.
