Precious metals have recovered on the Multi Commodity Exchange, with gold trading at ₹1,38,733 and silver at ₹1,81,125. The relief comes as global crude oil prices softened by 2–3%, easing some inflationary concerns. However, the market remains cautious due to high US interest rate expectations and geopolitical tensions.
Gold and silver futures on the Multi Commodity Exchange (MCX) started November with a recovery, snapping a period of sharp volatility. Gold futures were trading near ₹1,38,733 per 10 grams, while silver futures hovered around ₹1,81,125 per kilogram on Monday morning. This rebound follows a difficult week at the end of October, where gold prices dropped nearly 3.7% and silver fell by nearly 6% as investors sold commodities to cover losses in the technology sector.
The current price shift is largely linked to the cooling of crude oil prices. Brent crude fell by about 2–3%, trading near the $110–$111 per barrel mark, as diplomatic efforts surrounding the US-Iran situation gained attention. Lower oil prices generally reduce immediate inflation worries, which helps commodities like gold that are often viewed as a hedge against inflation.
Despite this recovery, the broader trend remains fragile. Technical data from the exchange shows that open interest—the number of active contracts—has increased. This indicates that many traders are continuing to build fresh short positions, suggesting that the current price rise may face resistance. The market is struggling with a "liquidation" effect, where broader equity market volatility forces traders to sell off commodities to maintain cash.
The outlook for precious metals faces ongoing pressure from global monetary policies. Markets are currently pricing in a 72% probability of a 25-basis-point interest rate hike by the US Federal Reserve this December. Rising interest rates generally increase the opportunity cost for holding non-yielding assets like gold, as investors can earn better returns in bonds or savings. Investors are now awaiting the upcoming US employment report scheduled for November 6, which is expected to provide further clues on the direction of future rate hikes.
Geopolitical risks, particularly regarding the US-Iran situation, remain a significant factor. Any unexpected shift in these tensions could cause rapid fluctuations in oil prices and market stability. For investors, the key monitorable will be whether the recovery in bullion holds in the face of persistent high bond yields and the central bank's hawkish tone.