Precious metals recover from recent declines as bargain buying supports prices, but a stronger dollar, elevated US bond yields and concerns over interest rates continue to cap the upside

Gold and silver prices staged a modest recovery on Friday, September 25, as buying at lower levels provided support to the precious-metals complex despite continued concerns over the outlook for US interest rates.

In the international market, gold futures on Comex were trading around $4,310 per ounce, while silver was near $64.35 per ounce. In the domestic market, MCX gold futures were trading around ₹1,50,700 per 10 grams, while silver futures were near ₹2,33,850 per kg at the time of reporting.

The rebound comes after both precious metals faced selling pressure in recent sessions as investors reassessed the path of US monetary policy. Higher interest rates and elevated bond yields generally reduce the appeal of non-yielding assets such as gold and silver.

However, the recent decline has also attracted buyers at lower price levels, preventing a deeper correction so far.

Gold Opens Higher on MCX

Gold futures started Friday's session on a positive note.

The benchmark October gold contract on the Multi Commodity Exchange opened ₹300 higher at ₹1,51,010 per 10 grams, compared with the previous close of ₹1,50,710.

The contract was subsequently trading around ₹1,51,135, representing a gain of approximately ₹425 from the previous close.

The recovery comes after gold prices moved lower from recent elevated levels. October gold had recently traded above ₹1.54 lakh per 10 grams but subsequently declined towards the ₹1.51 lakh zone.

The correction has encouraged fresh buying from traders looking to accumulate the metal at comparatively lower levels.

Gold had touched an earlier high of ₹1,80,779 per 10 grams on the domestic futures market, highlighting the significant volatility witnessed in the precious-metal market this year.

Silver Also Finds Support

Silver futures followed gold higher during Friday's session.

The benchmark December silver contract on MCX opened ₹254 higher at ₹2,33,736 per kg, compared with the previous close of ₹2,33,482.

At the time of reporting, the contract was trading around ₹2,33,883, up approximately ₹403 from the previous close.

Silver, like gold, has experienced a sharp correction from its earlier highs. The December contract had recently traded above ₹2.40 lakh per kg before declining towards ₹2.34 lakh.

The lower levels appear to have attracted fresh buying interest, although the metal continues to remain highly sensitive to movements in the dollar, US yields, industrial demand expectations and broader risk sentiment.

Silver's earlier domestic futures high stood at ₹4,20,048 per kg, underlining the exceptionally wide trading range seen in the commodity this year.

Comex Gold Recovers Above $4,300

International gold prices also remained above the $4,300-per-ounce mark.

Comex gold opened at around $4,309.50 per ounce against the previous close of $4,298. At the time of reporting, it was trading around $4,318.10, up about $20.10.

Gold had earlier touched a high of approximately $5,586.20 per ounce, meaning the metal has experienced a substantial correction from its peak.

The latest rebound suggests that investors are still willing to accumulate gold when prices move lower, particularly given the metal's traditional role as a portfolio diversifier during periods of geopolitical and economic uncertainty.

Silver Trades Near $64.35 Globally

Comex silver also opened marginally higher.

Silver futures opened around $64.26 per ounce compared with the previous close of $64. At the time of reporting, prices were around $64.36 per ounce.

Despite the modest recovery, silver remains considerably below its earlier high of $121.79 per ounce.

The correction has brought greater attention to the metal's medium-term demand outlook. Unlike gold, silver has a substantial industrial-demand component, with consumption linked to sectors such as electronics, solar technology, electrical equipment and other industrial applications.

Consequently, changes in expectations for global manufacturing and investment demand can influence silver more strongly than gold.

Why Precious Metals Remain Under Pressure

The primary challenge for gold and silver remains the outlook for US interest rates.

According to Vikram Subburaj, chief executive officer of Giottus.com, pressure on precious metals has been driven largely by increased concerns surrounding the future direction of US monetary policy.

The US Federal Reserve has raised its policy rate to 3.75–4.00 per cent, according to the market context cited in the report, leaving investors to assess whether further rate increases could become necessary.

Higher interest rates increase the opportunity cost of holding assets such as gold that do not generate regular interest income.

As expectations for higher rates increase, investors may shift some capital towards interest-bearing assets, particularly when US Treasury yields remain elevated.

Strong Dollar Adds to Gold's Headwinds

Currency movements are another important factor influencing precious-metal prices.

A stronger US dollar can make gold and silver more expensive for investors holding other currencies. This can weigh on international demand and put pressure on dollar-denominated commodity prices.

For Indian investors, however, domestic gold prices are influenced by both international gold prices and the rupee-dollar exchange rate. A weaker rupee can cushion some of the decline in international gold prices when translated into domestic prices.

This means that MCX gold may not always move in exactly the same direction or magnitude as Comex gold.

Bond Yields Remain a Key Variable

US Treasury yields are another important indicator for precious-metals traders.

When bond yields rise, the relative attractiveness of holding non-yielding gold tends to decline. Conversely, falling yields can provide support to gold by reducing the opportunity cost of holding the metal.

The direction of US inflation, employment data and Federal Reserve communication will therefore remain critical for precious metals in the coming sessions.

Markets are currently attempting to determine whether the recent monetary-policy environment represents a temporary period of restrictive policy or whether interest rates could remain elevated for longer.

Technical Levels for Gold

According to Ajay Kedia, director at Kedia Advisory, gold has immediate support around ₹1,50,110 per 10 grams.

A sustained break below this level could open the way for a move towards ₹1,49,510.

On the upside, resistance is placed around ₹1,51,330. A sustained move above this level could push gold towards ₹1,51,950.

These levels are important for short-term traders because the metal is currently trading close to a critical zone following its recent correction.

A breakout above resistance could encourage additional buying, while a breach of support could signal that selling pressure remains dominant.

Technical Levels for Silver

Silver's immediate support is seen around ₹2,31,320 per kg.

According to Kedia Advisory, a break below this level could expose the contract to further downside towards ₹2,29,160.

On the upside, resistance is positioned around ₹2,35,615. Sustaining above this level could allow silver to recover towards ₹2,37,750.

Silver is likely to remain more volatile than gold because of its dual role as both a precious metal and an industrial commodity.

Gold and Silver Outlook Hinges on US Rates

The near-term direction of precious metals is likely to remain closely linked to expectations surrounding US monetary policy.

If investors increasingly expect higher rates for longer, gold and silver could remain under pressure. A stronger dollar and elevated bond yields could reinforce that trend.

On the other hand, any moderation in rate expectations, softer economic data or renewed geopolitical uncertainty could encourage safe-haven demand and support precious metals.

For Indian investors, currency movements will provide another important layer to the outlook.

Market Outlook

Gold and silver are showing signs of buying interest at lower levels, but the latest rebound should be viewed in the context of the broader correction from their recent highs.

For MCX gold, ₹1,50,110 remains an important near-term support, while ₹1,51,330 is the key resistance zone cited by Kedia Advisory. For silver, ₹2,31,320 and ₹2,35,615 are the corresponding immediate support and resistance levels.

Beyond technical levels, traders will closely monitor US interest-rate expectations, the dollar index, Treasury yields, global economic data and geopolitical developments.

The combination of elevated prices, rate uncertainty and strong previous gains means volatility is likely to remain high. At the same time, lower-level buying indicates that investor interest in precious metals remains substantial, particularly when prices retreat sharply from recent highs.