Gold, silver prices rise on MCX as global tensions ease. What it means for buyers

Gold and silver prices extended their gains on the Multi Commodity Exchange (MCX) on Monday (July 27), tracking a rally in global markets as easing geopolitical tensions, a weaker US dollar and lower bond yields boosted demand for precious metals.

The move comes after signs of de-escalation in the conflict between the US and Iran eased concerns over supply disruptions and inflation, prompting investors to return to bullion while also raising hopes of stronger physical demand in India ahead of the festive and wedding season.

MCX gold futures (August 5 contract) were trading at ₹1.44 lakh per 10 grams, up 0.74%, while silver futures (September 4 contract) gained 1.17% to ₹2.24 lakh per kg.

Why are gold and silver prices rising?

The rally in precious metals has been driven by a combination of global factors.

The pause in military action between the US and Iran has reduced immediate geopolitical risks, sending crude oil prices sharply lower. Softer oil prices have, in turn, eased concerns over inflation, while a weaker US dollar and lower Treasury yields have improved the appeal of non-yielding assets such as gold and silver.

According to Manav Modi, Commodities Analyst at Motilal Oswal Financial Services, gold is receiving support from the weaker dollar and easing geopolitical tensions, although gains have remained measured as investors await the US Federal Reserve's policy decision later this week.

He said markets broadly expect the Fed to keep interest rates unchanged, but investors will closely monitor its commentary on inflation and the future rate path. The outcome of the meeting is expected to be the key trigger for bullion prices in the near term.

A breather for jewellery buyers

The cooling in geopolitical tensions could also bring some relief to domestic consumers who have faced record-high gold prices over the past few months.

Colin Shah, Managing Director of Kama Jewelry, said the easing of the US-Iran conflict has reduced the risk premium embedded in gold prices, creating an opportunity for buyers who had delayed purchases.

He believes the moderation in prices could help clear inventory ahead of the festive and wedding season, with demand likely to be led by lightweight plain and studded jewellery as consumers remain price-conscious.

Silver continues to attract attention

While gold remains the preferred safe-haven asset, silver has also gained momentum, supported by both investment demand and its industrial applications.

Darshan Desai, CEO of Aspect Bullion & Refinery, said gold and silver continue to demonstrate resilience amid global macroeconomic uncertainty and geopolitical developments. Although prices may fluctuate with international events and currency movements, the long-term outlook for both metals remains positive.

He added that consumers and investors are looking for pure and responsibly sourced bullion products, making transparency and supply-chain credibility more important than ever.

What should investors watch next?

The focus has now shifted from geopolitical developments to monetary policy. The US Federal Reserve's policy decision, along with its commentary on inflation and interest rates, is expected to determine the next leg of movement in gold and silver prices.

For Indian investors, MCX prices will continue to be influenced by global bullion trends, movements in the rupee and the direction of the US dollar. Meanwhile, jewellers expect the recent cooling in prices to gradually improve consumer demand as the festive buying season approaches.

Note To Readers

This article is for informational purposes only and should not be construed as investment advice. Readers should consult certified experts before making any investment decisions.