Gold and silver prices opened with a mixed performance on the MCX on Thursday, as softer-than-anticipated US consumer inflation diminished expectations for an imminent rate hike by the Federal Reserve. Investors are currently anticipating producer price data for additional insights into the trajectory of inflation. In the domestic market, silver futures for September 2026 delivery were down by Rs 535 at Rs 2,37,300 per kg. Gold futures for October 2026 delivery increased by Rs 1,400 over the course of two sessions, reaching Rs 1,55,145 per 10 grams.
Fed policymakers are likely to encounter diminished pressure to elevate interest rates next month following the release of data on Wednesday, which indicated a deceleration in inflation for the second consecutive month on a year-over-year basis. However, the data may provide limited confidence that monetary policy continues to be sufficiently stringent to maintain inflation on a declining trajectory. The Consumer Price Index increased by 3.4% over the 12 months ending in July, a slight decrease from the 3.5% recorded in June, as reported by the Bureau of Labour Statistics. The reading was in line with economists’ expectations.
Markets currently reflect a 40% likelihood of an interest rate increase at the Federal Reserve’s September meeting, a decrease from approximately 54% the previous week, as indicated by the CME FedWatch Tool. Expectations of lower interest rates typically bolster gold by diminishing the opportunity cost associated with holding this non-yielding asset. Investors will now focus on the Producer Price Index, scheduled for release later on Thursday, seeking additional indications that price pressures are subsiding. However, the July CPI data did not capture the recent surge in oil prices, as assaults on vessels in the Middle East persisted and negotiations intended to resolve the Iran conflict stalled.
Spot gold increased by 0.6% to $4,433.62 per ounce by 0108, following a rise of approximately 1% earlier, reaching its highest level since June 5. US gold futures for December delivery increased by 0.6% to $4,493. Among other precious metals, spot silver increased approximately 1% to $65.91 per ounce after reaching its highest level since June 22 in the prior session. Platinum increased by 0.3%, reaching $1,762.70, whereas palladium experienced a modest rise of 0.1%, settling at $1,371.20.
