Gold and silver prices in India rebounded on Tuesday, tracking a strong rally in the global bullion market. The domestic MCX gold price recovered its previous losses, jumping over 1% to cross the ₹1.55 lakh mark per 10 grams, while MCX silver prices also saw a significant uptick due to renewed buying interest, as reported by Livemint.
In the international market, spot gold advanced strongly, trading above $4,520 per ounce by 0057 GMT, fully recovering from the brief dip seen in previous sessions. US gold futures for December delivery also rose, gaining nearly 1.2% to hover around $4,565.30, according to Livemint.
The upward momentum comes as traders globally seek safe-haven assets amid escalating tensions in the Middle East, while also awaiting crucial US labour market data due later this week, which could shape the Federal Reserve's monetary policy trajectory, Livemint reported.
Geopolitical tensions and oil prices
Safe-haven buying spiked after the US military recently targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz, marking the first such military engagement in the region in over a month, according to Livemint. Moneycontrol reported that US forces struck Iranian rocket launchers near the Strait of Hormuz, followed by Iranian attacks on targets in the UAE and Jordan, raising concerns over potential disruptions to global energy supplies.
Oil prices extended gains after recording their strongest rise in three weeks, reinforcing inflation worries and strengthening the case for the Federal Reserve to keep interest rates elevated for longer, Moneycontrol reported.
US labour data and Fed expectations
Market participants will focus on ADP Non-Farm Employment Change on Wednesday, followed by Non-Farm Payrolls and Unemployment data on Friday, as markets adjust expectations around a possible Fed rate hike in September, Moneycontrol reported.
In the international market, spot gold traded 0.19 percent higher to $4,490.10 per ounce, and silver inched 0.23 percent to $66.37 per ounce during early trading on September 1, according to Moneycontrol. The domestic MCX futures for the October contract traded 0.06 percent lower to Rs 1,54,365 per 10 grams, while the silver contract for September surged 0.25 percent to Rs 2,34,420 per kilogram, the outlet reported.
Despite the recent correction, gold remains on track to register nearly a 10 percent gain, supported by strong safe-haven demand, central-bank buying and concerns surrounding US fiscal sustainability, Moneycontrol reported, citing Manav Modi, Commodities Analyst at Motilal Oswal Financial Services.
According to Livemint, gold gained over 10% in August. The rally is driven by the debasement trade, as investors flock to gold to protect portfolios, according to Trading Economics, cited by Livemint.
Domestic prices
In the retail market, gold is primarily sold in 24-karat and 22-karat purities. While 24-karat represents the purest form of the metal, 22-karat is widely preferred for crafting jewellery in India due to its added durability, Livemint reported. Detailed city-wise rates for 10 grams of gold were provided by both outlets.