MCX Silver Surges 2.71% to ₹1.87 Lakh as Bullion Rebounds From Inflation Sell-Off

Bullion bounced back on Wednesday.

December silver futures on the Multi Commodity Exchange climbed 2.71% to ₹1.87 lakh per kilogram on Wednesday, November 11, clawing back ground surrendered during a bruising Tuesday sell-off. Gold joined the advance. December gold futures gained 0.81% to trade at ₹1.41 lakh per 10 grams. The turnaround halted a rout that stripped nearly 3% off domestic contracts after unexpectedly hot inflation figures in the United States rattled commodity desks worldwide.

International spot desks supplied the initial lift. Spot silver leaped 2% to $52.52 per ounce, outpacing gold as physical bargain hunters stepped into the market. Spot gold edged up 0.3% to $4,044.56 an ounce, while US gold futures added 0.6% to reach $4,052.50.

Technical buying drove the early momentum. But bullion remains handcuffed to shifting expectations around US borrowing costs.

The US Inflation Shock and Rate Expectations

Tuesday's sharp retreat followed an uncomfortable surprise from Washington. Consumer prices in the United States rose 0.4% in October, topping consensus estimates of 0.3%. The overshoot immediately hardened bets that the Federal Reserve will deliver another interest rate increase before year-end.

The policy repricing was swift.

Data from CME's FedWatch tool showed interest rate futures pricing a 100% probability of a Federal Reserve rate hike in December. That probability stood at 84% prior to the consumer price print. Non-yielding assets took an immediate hit. Because bullion pays neither interest nor dividends, higher official lending rates and rising sovereign returns erode its relative appeal against cash and sovereign paper. Bond traders dumped short-dated paper on Tuesday, driving the US two-year Treasury yield up 18 basis points to 4.73% and locking precious metals under intense selling pressure.

Silver Outpaces Gold in Uneven Rebound

The recovery across precious metals has played out asymmetrically. Silver reclaimed the bulk of Tuesday's losses within hours, while gold struggled to mount an equivalent charge. Gold contracts remained roughly $60 an ounce beneath their pre-inflation settlement mark, having clawed back less than one-third of Tuesday's drawdown.

Market Context: Bullion flows in India remain exposed to foreign exchange swings. Because the country imports the vast majority of its gold and silver supply, any appreciation in the rupee cushions domestic buyers by lowering landed landed-import costs in local currency terms.

Subburaj noted that an anticipated strengthening of the rupee against the US dollar could soften the blow of elevated global bullion rates for Indian consumers. Yet macro headwinds still loom large over physical and paper trades.

Desk heads are keeping risk limits tight. All eyes now shift to Friday's release of the US producer price index report, which will supply the next direct gauge of factory-gate pipeline inflation and set the tone for the Federal Reserve's December policy deliberations.