Gold, silver prices rise as traders pare bets on October Fed rate hike

Gold and silver prices rose on Monday, October 19, as traders scaled back expectations of an interest-rate increase in October following Federal Reserve Chairman Kevin Warsh’s dovish comments on monetary policy.

 

Lower crude oil prices also supported bullion.

 

In the global market, gold futures on Comex were trading near $4,200 per ounce, while silver was trading near $57.60 per ounce. In the domestic market, gold futures on the Multi Commodity Exchange (MCX) were trading near ₹1,48,300 per 10 gram at the time of writing, while silver futures were trading near ₹2,12,350 per kg.

Gold prices rise

Gold futures opened higher. On the MCX, the benchmark December gold contract opened ₹479 higher at ₹1,48,397 per 10 gram. The previous close was ₹1,47,918.

 

 

At the time of writing, the contract was trading ₹382 higher at ₹1,48,300.

 

Gold futures had touched a high of ₹1,80,779 per 10 gram earlier this year. 

Silver also gains

Silver futures also opened higher. On the MCX, the benchmark December silver contract opened ₹1,132 higher at ₹2,12,319 per kg. The previous close was ₹2,11,187.

 

At the time of writing, the contract was trading ₹1,183 higher at ₹2,12,370.

 

Silver futures had touched a high of ₹4,20,048 per kg earlier this year.

Gold, silver firm in global market

Gold and silver futures were trading higher in the international market.

 

On Comex, gold opened at $4,185 per ounce. The previous closing price was $4,181.10. At the time of writing, it was trading $16.10 higher at $4,197.20 per ounce.

 

Gold prices had touched a high of $5,586.20 per ounce earlier this year.

 

Comex silver futures opened at $57.13 per ounce. The previous closing price was $57.30. At the time of writing, it was trading $0.31 higher at $57.61 per ounce.

 

Silver prices had touched a high of $121.79 per ounce earlier this year.

Why are gold and silver rising?

Vikram Subburaj, chief executive officer of Giottus.com, said the decline in crude oil prices was easing inflation concerns, providing support to gold in the international market.

 

For India, cheaper crude oil could also reduce pressure on the rupee. These factors were supporting gold and silver prices, he said.

 

Subburaj said traders in silver should remain prepared for higher volatility. In the previous trading session, silver prices saw fluctuations of around 1.56 per cent, compared with 0.89 per cent in gold.

 

Investors should therefore decide their exposure to both metals according to their risk appetite, he said. Long-term investors could consider buying in instalments rather than investing a lump sum at one go.

Levels to watch

According to Ajay Kedia, director, Kedia Advisory, gold was technically witnessing short covering. Open interest declined 2.15 per cent to 16,717 contracts as prices rose by ₹429.

 

Gold has support at ₹1,47,350, followed by ₹1,46,780. Resistance is seen at ₹1,48,660. If prices sustain above this level, gold could rise towards ₹1,49,400.

 

Silver was also witnessing short covering. Open interest declined 1.78 per cent to 20,056 contracts as prices rose by ₹527.

 

Silver has support at ₹2,09,930, followed by ₹2,08,670. Resistance is seen at ₹2,13,220. If prices sustain above this level, silver could rise towards ₹2,15,250.

MCX, Comex prices

 

Note: MCX gold futures prices are in rupees per 10 gram, while MCX silver futures prices are in rupees per kg. Comex gold and silver futures prices are in dollars per ounce. Last traded prices are as of the time of writing.