The precious metals complex is playing a dangerous game of tug-of-war. On COMEX, gold futures settled at $4,177.50 per ounce, up $7.40 or 0.18%, while silver crawled to $57.430, gaining 0.48%. It’s a thin recovery. The market is still digesting a sharp sell-off that hit sentiment earlier in the week. Investors are bracing for the Federal Reserve to keep monetary policy tight, a stance that continues to squeeze non-yielding assets like bullion.
The domestic picture is starkly different. In New Delhi, gold prices tumbled for the fourth consecutive session on Thursday, shedding ₹900 to close at ₹1.49 lakh per 10 grams. Silver fared worse, plunging ₹6,000 to ₹2.15 lakh per kilogram, according to PTI data. The culprit? A robust rupee. The INR strengthened for a fifth straight day, closing 12 paise higher at ₹95.05 against the US dollar. This appreciation, combined with muted physical demand, is capping local price gains even as global spot prices inch up.
Justin Khoo, Senior Market Analyst – APAC at VT Markets, notes that the market is hyper-sensitive to US inflation data. September’s CPI hit 3.7%, beating the expected 3.6%. That little decimal point matters. It suggests the Fed might hold rates higher for longer, or worse, pivot to hikes. Higher yields and a stronger dollar are toxic to gold. "A higher-than-expected inflation reading could push Treasury yields and the dollar higher, putting pressure on gold," Khoo said.
Yet, geopolitical chaos offers a floor. Tensions in West Asia, involving Iran, Saudi Arabia, and Houthi attacks on shipping, keep the safe-haven bid alive. Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Ltd. and president of the India Bullion and Jewellers Association, points to risks around the Strait of Hormuz and energy infrastructure. These factors prevent a total collapse in prices. Kothari sees the recent dip from $4,080 as a buying opportunity, while silver finds support at $55–$56 with a potential bounce to $58.50.
Traders are now eyeing specific technical triggers. Khoo flags $4,280 as the key upside resistance for gold, with $4,055 as the downside support. For silver, he watches $58.95 and $57.40. The next few weeks hinge on Fed Chair Kevin Warsh’s remarks and upcoming economic data. If inflation cools, yields drop, and gold rallies. If it sticks, expect more volatility. The bullion market is no longer just about safety; it’s a bet on the Fed’s patience.