Key Highlights:

  • Gold futures (October) rose 0.52% to Rs 1,51,598, touching an intraday high of Rs 1,52,100.
  • Silver futures (December) surged as much as 1.66% to hit an intraday high of Rs 2,35,988.
  • US gold futures for December delivery rose about 1% to $4,380 per ounce internationally.
  • The Fed is widely expected to raise rates by 25 basis points, with softer crude oil and lower bond yields supporting bullion.
  • Geopolitical tensions, including the unresolved US-Iran conflict and a Houthi drone interception, added further support to prices.

Bullion Prices Climb Ahead of a Key Fed Decision

Gold and silver prices traded up to 1 per cent higher on Wednesday, supported by softer crude oil prices and lower US bond yields, as investors awaited the US Federal Reserve's upcoming policy decision. The rally in precious metals reflects a broader shift in investor positioning ahead of a decision widely expected to shape near-term market sentiment.

Gold's Movement Through the Day

At around 10:45 am, gold futures for October delivery were trading at Rs 1,51,598, an increase of 0.52 per cent or Rs 789. The yellow metal recorded an intraday high of Rs 1,52,100 during the session, marking a gain of nearly 1 per cent or Rs 1,291 at its peak. It had also touched an intraday low of Rs 1,51,450, which still represented an increase of about half a per cent, indicating that gold held firmly in positive territory throughout the session's early trading.

Silver's Sharper Rally

Silver futures for December delivery showed an even sharper move, surging as much as 1.66 per cent or Rs 3,870 to hit an intraday high of Rs 2,35,988. At last count, the white metal was trading at Rs 2,35,079, up Rs 2,961 or 1.28 per cent, having touched an intraday low of Rs 2,34,540, a gain of 1.04 per cent or Rs 2,422 from the previous close, underscoring that silver's gains outpaced gold's for much of the session.

Gold's Technical Setup

According to analysts, MCX gold opened with a mild gap-up but remained capped by its 50-day exponential moving average, a technical indicator often used to gauge medium-term trend strength. The contract recovered from the Rs 1,50,700-1,50,000 support zone, suggesting that this range has held as a meaningful floor for the metal in recent sessions. Immediate resistance for gold is seen at Rs 1,54,000-1,54,700, with a break above that zone potentially opening the way toward Rs 1,56,300-1,57,000. On the downside, support is placed at Rs 1,50,700-1,50,000, followed by a further support zone at Rs 1,48,000-1,47,300.

Silver's Technical Levels

MCX silver also opened higher, trading near Rs 2,35,000 after recovering from the Rs 2,30,000 zone. Resistance is seen at Rs 2,39,000-2,40,000, followed by Rs 2,45,000-2,46,000, while support is placed at Rs 2,34,000-2,33,000 and Rs 2,30,000-2,29,000, giving traders a fairly clear technical framework for gauging the metal's next move depending on how these levels are tested in the coming sessions.

International Gold Prices Also Rise

In the international market, US gold futures for December delivery rose about 1 per cent to $4,380 per ounce, a move broadly consistent with the domestic price action seen on the MCX, reflecting a synchronised global rally in gold prices rather than one driven purely by domestic factors.

What's Driving the Rally

The buying in gold was supported by a decline in crude oil prices, which in turn eased pressure on the US dollar and Treasury yields. Lower bond yields typically make non-yielding assets like gold relatively more attractive to investors, since the opportunity cost of holding gold instead of interest-bearing instruments diminishes when yields fall.

The Fed Decision Looming Large

Adding to the anticipation, the Federal Reserve is widely expected to raise interest rates by 25 basis points, according to experts. While a rate hike might typically be expected to weigh on gold prices given the metal's inverse relationship with yields, the fact that this move is already largely anticipated by markets means its actual announcement is unlikely to be the primary swing factor; instead, the central bank's accompanying guidance on future policy direction is likely to carry more weight for how bullion prices move in the sessions following the decision.

Geopolitical Tensions Adding to Uncertainty

Beyond the immediate monetary policy backdrop, geopolitical tensions also remained a key factor influencing bullion prices. The unresolved US-Iran conflict continues to weigh on market sentiment, while reports of a Houthi drone being intercepted by Saudi Arabia and explosions reported on Iran's Qeshm Island added further to the prevailing sense of geopolitical uncertainty. Such tensions typically reinforce gold and silver's traditional role as safe-haven assets, with investors often turning to precious metals during periods of heightened geopolitical risk, a dynamic that appears to be compounding the price support already coming from softer yields and easing crude oil prices.