Gold and Silver Prices Rise Significantly
Gold and silver prices moved higher for a second consecutive session with silver putting in a particularly strong showing. As per a Moneycontrol Hindi report on September 18, silver prices jumped almost 6% in two days with softer crude oil prices supporting the bullion markets.
The rally came after a short period of pressure on precious metals following the US Federal Reserve’s interest-rate decision on September 16. Investors returned to gold and silver despite the higher rate environment, helping prices to recover strongly in international markets.
Silver Gains Almost 6% in Two Sessions
Silver was the stronger performer of the two precious metals. Spot silver was up about 1.64% at $66 an ounce by September 18. Silver has risen 6% in the last two trading sessions.
Silver contracts on MCX in the domestic futures market were up ₹1,896, or 0.80%, at ₹2,40,101 per kg in evening trade on 18 September.
The sharp move underscores the volatility in silver prices, which are driven by investor demand and expectations of industrial use.
Gold Moves Higher Too
Meanwhile, gold prices also continued to recover. Spot gold was trading at around $4,350 per ounce on September 18, up around 0.24% in the session, the Moneycontrol report said.
Gold futures on the MCX were quoted at around ₹1,53,430 per 10 grams, up by about ₹449 or 0.29% in the session.
Gold had also gone up in international markets after falling following the Federal Reserve’s decision on September 16.
What’s Driving Gold and Silver Prices Higher?
Falling crude oil prices have been a key factor behind the latest rally.
Brent crude, which had traded around $108-$109 a barrel earlier, fell toward around $104 a barrel. Lower oil prices can ease inflation concerns, which in turn can boost sentiment for precious metals.
Gold was also supported by short covering as investors positioned for a decline after the Fed’s rate decision.
Separately, Reuters reported that spot silver rose 2.3% to $66.70 an ounce on September 18, while spot gold reached a one-week high. The report also said lower oil prices and fading inflation concerns helped the gold rally.
Fed rate decision remains key factor
A major factor behind precious-metal prices continues to be the US Federal Reserve. The Fed raised rates by 25 basis points on September 16, taking the target range to between 3.75% and 4%.
Higher interest rates usually put downward pressure on non-yielding assets such as gold and silver as investors tend to prefer interest-earning assets.
However, recent price action indicates that other factors including crude oil prices, currency moves, geopolitical uncertainty and investor positioning are also playing a role in bullion markets.
Gold Faces Resistance Around $4,400-$4,440
Market participants are closely monitoring the international gold price near the range of $4,400-$4,440 per ounce.
Market commentary cited by Moneycontrol said this level could encounter resistance for gold. A sustained push above these levels could be a key technical development for the metal.
At the same time, investors are watching developments in the Middle East and moves in the price of crude oil, both of which can influence inflation expectations and safe-haven demand.
What Investors Should Watch Now
In the near term, gold and silver are likely to be sensitive to a number of global factors including:
- US Federal Reserve interest rate expectations
- Crude oil price trends
- Dollar strength
- Inflation figures
- Geopolitical events
- World demand for investment in precious metals
Silver’s rally of almost 6% over two sessions is a reminder of how quickly the metal can move when market sentiment shifts.
Conclusion
Gold and silver prices have staged a strong recovery after getting hit because of the Federal Reserve’s latest rate decision. Silver has led the way back up, rising almost 6% in two sessions, while gold has also been edging higher.
Easing crude oil prices offer some support to bullion markets as they ease some inflation concerns. Still, investors will check out Fed policy, oil prices, the US dollar and geopolitical developments before playing the next big move in precious metals.
