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MCX Futures Surge On Sharp Retreat In Crude Oil Prices and Cooling U.S. Inflation Data

Traders Expect Indian Precious Metal Demand To Remain Supported Heading Into The Navratri Festival Season

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Indian precious metals prices jumped on Thursday, tracking spot market gains, as a sharp retreat in global crude oil prices and cooling U.S. inflation data eased expectations of further aggressive central bank rate hikes.

MCX gold futures surged by 1,000 rupees, briefly reclaiming the key 150,000 rupee mark in early trade before trimming gains slightly.Silver futures advanced by 2,200 rupees, or 1%, scaling back above 226,000 rupees per kilogram.

On the domestic front, traders expect Indian precious metal demand to remain supported heading into the Navratri festival season, though investors remain attentive to the upcoming Reserve Bank of India (RBI) monetary policy decision for local directional cues.

The rally mirrored gains in global benchmark markets, where spot gold rose 1% to top $4,175 per ounce, while spot silver outperformed with a 1.2% rise to trade around $61 per ounce.

The surge in safe-haven demand came as global oil benchmark crude prices slipped 1% to 1.5%, driven by recovering shipment volumes. U.S. West Texas Intermediate (WTI) crude fell below $90 per barrel, while Brent crude dipped below $96 per barrel.

Adding momentum to bullion was cooler-than-expected U.S. economic data. The latest U.S. Personal Consumption Expenditures (PCE) price index rose 0.3% in August against expectations of 0.4%, pulling headline PCE inflation down to 3.4%. Core PCE rose 0.2%, below the 0.3% forecast.

The softer inflation prints cooled rate hike anxieties, driving market projections for an October rate increase down to 38%, from earlier expectations above 70%.

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Gold prices in India extend recovery on softer U.S. dollar, easing Treasury yields, lower crude oil prices.

Market participants attributed the firming metal prices to a pause in U.S. yield gains following strong demand at the latest 30-year U.S. Treasury auction, which relieved pressure on non-yielding assets.

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Gold prices in India extended their recovery on Saturday, with 24-carat gold climbing back above the 151,000 rupee mark per 10 grams, supported by a softer U.S. dollar, easing Treasury yields, and lower crude oil prices.

The domestic benchmark rate for 24K gold rose by 710 rupees, or approximately 0.47%, to 151,420 rupees per 10 grams. For bulk purchases, 100 grams of 24K gold stood at 1,514,200 rupees, up 7,100 rupees from the previous session.

Jewellery-grade 22K gold advanced by 650 rupees to 138,800 rupees per 10 grams, while 18K gold climbed 540 rupees to hit 113,570 rupees per 10 grams. Per sovereign (8 grams), 24K gold traded at 121,136 rupees and 22K gold at 111,040 rupees.

The rebound follows a volatile week for bullion. Over the past four sessions, 24K gold has climbed nearly 1.5%, gaining roughly 2,240 rupees from 149,180 rupees on Oct. 6. On the Multi Commodity Exchange (MCX), gold futures rebounded above 151,000 rupees after dipping toward the 149,000 rupee level earlier in the week.

In international markets, spot gold traded near $4,174.78 an ounce after recovering from $4,118.63 in the previous session and briefly breaching $4,200. International spot silver surged over 2% to trade around $60.40 an ounce, driving domestic silver rates in India to approximately 235,000 rupees per kilogram.

Market participants attributed the firming metal prices to a pause in U.S. yield gains following strong demand at the latest 30-year U.S. Treasury auction, which relieved pressure on non-yielding assets.

However, analysts warned that near-term gains may remain capped due to expectations surrounding Federal Reserve monetary policy.The key constraint is the Federal Reserve’s hawkish stance, with policymakers signaling that further tightening may be necessary to bring inflation back to target.

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