Gold trades near $4,160 on Comex while MCX gold hovers around ₹1.49 lakh; silver remains under pressure as higher yields, a stronger dollar and elevated crude oil prices weigh on precious metals
Gold and silver prices remained under pressure on Tuesday, September 29, as a combination of rising global bond yields, a stronger US dollar and renewed inflation concerns reduced demand for precious metals.
In the international market, gold futures on Comex were trading around $4,160 per ounce, while silver was near $61 per ounce. In the domestic market, MCX gold futures were around ₹1,48,800 per 10 grams, while silver futures were trading near ₹2,25,300 per kg.
The weakness follows a sharp sell-off in precious metals in the previous session. Gold and silver have come under pressure as investors reassess the outlook for US interest rates amid rising oil prices and higher Treasury yields.
Gold Opens Lower on MCX
The benchmark December gold contract on the Multi Commodity Exchange opened ₹131 lower at ₹1,48,766 per 10 grams, compared with the previous close of ₹1,48,897.
The contract was later trading around ₹1,48,818, down ₹79 from the previous close.
Gold's decline follows a substantial correction from its earlier highs. The precious metal had touched ₹1,80,779 per 10 grams earlier this year, highlighting the scale of the recent retreat.
The global move has also been significant. Gold futures on Comex opened around $4,150.10 per ounce against the previous close of $4,168.40 and were subsequently trading near $4,166.60.
Silver Extends the Decline
Silver has also witnessed considerable selling pressure.
The benchmark December silver contract on MCX opened ₹1,497 lower at ₹2,25,945 per kg, compared with the previous close of ₹2,27,442. It later traded around ₹2,25,321, down more than ₹2,100.
In the international market, Comex silver opened near $61.03 per ounce against the previous close of $61.71 and was trading around $60.97.
Silver had previously touched a high of $121.79 per ounce, meaning the metal has experienced a substantial correction from its earlier peak.
The decline has also been accompanied by higher market participation. Recent trading data showed silver open interest rising even as prices declined, a combination that can indicate fresh positions being built during the sell-off.
Why Are Gold and Silver Falling?
The primary pressure on precious metals is coming from the bond market and currency markets.
When government bond yields rise, interest-bearing assets can become relatively more attractive compared with gold and silver, which do not generate regular interest income. A stronger dollar can also make dollar-denominated commodities more expensive for investors holding other currencies.
US Treasury yields have risen sharply amid renewed inflation concerns and expectations that the Federal Reserve may need to maintain or further tighten monetary policy. Reuters reported that the US 10-year Treasury yield moved above 5 per cent, while the dollar index reached a two-month high.
These developments have created a challenging short-term environment for bullion.
Crude Oil Adds Another Layer of Pressure
The rise in crude oil prices is an important part of the current market equation.
Higher oil prices can feed into inflation expectations, particularly when supply disruptions or geopolitical tensions are involved. If investors expect inflation to remain elevated, expectations of interest-rate cuts can weaken or expectations of additional tightening can strengthen.
Reuters reported that Brent crude moved above $107 per barrel on September 29 amid continued uncertainty surrounding Middle East supply and the US-Iran situation.
For precious metals, the combination of higher oil prices, rising yields and a stronger dollar creates multiple headwinds at the same time.
Rising Indian Bond Yields and a Weaker Rupee
Domestic financial markets are also facing pressure from higher yields and currency movements.
India's benchmark 10-year government bond yield rose to around 7.19 per cent on September 28, reaching its highest level since April 2024, according to Business Standard's market report. Elevated crude prices and a weaker rupee have added to concerns in the domestic bond market.
The rupee also weakened beyond ₹96 per US dollar on September 29 before recovering somewhat, according to Reuters. Higher oil prices are particularly important for India because the country depends heavily on imported crude.
For Indian bullion investors, therefore, international gold prices are only one part of the equation. The rupee-dollar exchange rate can significantly influence domestic gold and silver prices.
Gold: Key Levels to Watch
According to the technical levels cited in the supplied market report, gold currently has support around ₹1,47,570 per 10 grams.
A sustained move below this level could expose the contract to the next support around ₹1,46,245.
On the upside, immediate resistance is seen around ₹1,50,610. A sustained move above this level could open the way towards ₹1,52,325.
These levels should be treated as technical reference points rather than assured price targets. Price action will continue to depend on global yields, the dollar, crude oil, central-bank expectations and geopolitical developments.
Silver: Support and Resistance
Silver is facing a similar technical setup.
The key support level highlighted in the supplied market analysis is around ₹2,24,730 per kg. A decisive break below this zone could expose silver to the next level near ₹2,22,015.
On the upside, resistance is placed around ₹2,31,230. A sustained move above that level could potentially take prices towards ₹2,35,015.
The wider silver market remains more volatile than gold because silver has both investment and industrial demand drivers. Changes in manufacturing activity, technology demand and global economic growth can therefore influence silver alongside monetary-policy expectations.
Gold and Silver ETFs Also Feel the Impact
The correction in bullion prices has spilled into exchange-traded funds tracking gold and silver.
Business Standard reported that several gold and silver ETFs declined sharply on September 28 as the underlying metals came under pressure. Silver ETFs were particularly affected, with several products falling between 3.5 per cent and 4 per cent during the session.
Because ETFs generally track the underlying commodity, sustained weakness in gold and silver can translate into pressure on ETF prices as well.
For investors, however, the performance of an ETF should be assessed separately from the spot or futures price because expense ratios, tracking differences and market liquidity can influence returns.
What Investors Should Track Next
The bullion market is likely to remain sensitive to several variables over the coming sessions.
US bond yields: A continued rise in Treasury yields could keep pressure on non-yielding assets.
US dollar: Further dollar appreciation could create another headwind for internationally priced commodities.
Crude oil: Any sustained rise in oil prices could reinforce inflation concerns and alter expectations for monetary policy.
Federal Reserve expectations: Market pricing for future US interest-rate decisions remains critical for gold and silver.
Geopolitical developments: Any escalation or de-escalation in Middle East tensions could quickly affect crude, the dollar, yields and safe-haven demand.
Rupee movement: Indian investors also need to monitor the rupee because currency depreciation can partly offset a decline in international gold prices.
Correction or Bigger Trend Change?
The recent decline does not by itself establish whether gold and silver are entering a prolonged downtrend or undergoing a sharp correction after their earlier rally.
Gold has experienced strong gains over the broader period, while silver has also moved substantially higher before the recent sell-off. Such rallies can be followed by periods of profit-taking, particularly when macroeconomic conditions change.
Business Standard market commentary has highlighted the importance of the $4,100 region for international gold, while domestic analysts have identified ₹1.48 lakh and ₹1.50 lakh as important areas for assessing the near-term technical structure.
Investors should therefore watch whether prices stabilise near important support zones or whether further selling accompanies another rise in yields and the dollar.
Market Outlook
Gold and silver remain under near-term pressure as higher global bond yields, a stronger US dollar and elevated crude oil prices combine to challenge precious-metal demand. The rise in US Treasury yields and renewed expectations of tighter monetary policy have reduced the appeal of non-yielding assets, while geopolitical developments continue to keep oil markets volatile.
For Indian investors, the domestic picture is further complicated by the rupee's movement and rising Indian bond yields. Gold needs to hold the ₹1,47,570 support zone to avoid deeper technical weakness, while ₹1,50,610 remains an important upside level in the near term. For silver, ₹2,24,730 and ₹2,31,230 are key levels to monitor.
The next major directional cues are likely to come from movements in the dollar, US and Indian bond yields, crude oil prices, Federal Reserve expectations and geopolitical developments. Until these factors stabilise, bullion markets may continue to experience elevated volatility.