Gold and silver prices are recovering Friday after a sharp mid-week selloff, with both metals drawing support from a weaker dollar and a retreat in US Treasury yields, even as persistent inflation concerns limit the upside.
COMEX Gold futures are trading just below $4,200, up 0.57 per cent on the day, after briefly falling below $4,100 earlier this week for the first time since early August. COMEX Silver is outperforming, up 1.23 per cent at around $57.85, pushing back above the $57.00–$57.50 band that had previously acted as resistance. The gold-silver ratio has eased to around 73, reflecting silver’s relative outperformance.
The recovery follows Thursday’s rebound, which was supported by a decline in the 10-year US Treasury yield to a three-week low. Risk aversion triggered by concerns over elevated interest rates and stretched equity valuations drove investors into government bonds, pulling yields lower and easing pressure on non-yielding assets. The dollar also retreated from recent highs.
September CPI, however, came in at 3.7 per cent annually — above expectations — keeping prospects of another Federal Reserve rate hike this year in focus. Comments from Fed officials Mary Daly and Michelle Bowman tempered expectations of an October move. Markets now await Fed Chair Warsh’s appearance at the IMF meetings and the October 27–28 FOMC meeting.
“… persistent Middle East uncertainty and strong underlying investment demand continue to provide structural support,” … Motilal Oswal’s commodities analyst Manav Modi noted, adding that better-than-expected US PPI data and lower retail sales have shifted attention to US industrial production figures due later Friday.
On domestic bourses, MCX Gold is trading near ₹147,700, up just 0.13 per cent, with gains muted relative to the international market. MCX Silver is at ₹211,600, up 0.45 per cent. A firmer rupee is weighing on both. USD/INR has slipped to around 94.76, down 0.30 per cent on the day, as offshore traders cut short positions and the RBI continues to sell dollars through its special window for oil companies.
“… the rupee is expected to open firmer amid offshore short-covering and RBI dollar sales, with USD/INR moving toward 94.70, limiting gains in rupee-denominated gold,” … said Ponmudi R, CEO of Enrich Money.
In a separate development, SEBI has directed fund houses to halt new subscriptions in Fund of Funds schemes tracking gold and silver, ahead of the festive season — a move that could affect retail inflows into the asset class in the near term.
WTI crude fell 1.69 per cent to around $95.90, pressured by diplomatic signals even as supply security concerns stemming from vessel attacks in the Strait of Hormuz and a Houthi strike on Saudi Aramco’s headquarters remained in focus.