Gold and silver prices in the domestic market experienced a modest increase following a significant decline in the prior session. Investors continue to exercise caution as stronger-than-anticipated US inflation data has heightened expectations for a potential rate increase by the Federal Reserve in the upcoming month, thereby applying pressure on precious metals. In the domestic market, silver futures for December 2026 delivery increased by Rs 2,938, reaching Rs 1,85,514 per kg. Gold futures for December 2026 delivery increased by Rs 846, reaching Rs 1,44,546 per 10 grams. Gold prices experienced a modest increase in early Asian trading today, yet they remained near a one-week low in the wake of unexpectedly robust US inflation data.
Market participants are currently anticipating a half-percentage-point increase in the Federal Reserve’s interest rate in the upcoming month. Odds surged following the release of data indicating that US inflation accelerated beyond expectations in October, coupled with signals from policymakers suggesting a readiness to adopt a more aggressive tightening of monetary policy. Traders currently perceive a complete certainty of a rate increase in December, an increase from the previous 84% likelihood prior to the data release, as reported by Reuters referencing CME’s FedWatch tool.
Federal Reserve’s Vise Chair of Supervision, Michelle Bowman, has aligned with an increasing cohort of policymakers in emphasising that the primary objective of the American central bank is to mitigate inflation. However, she refrained from explicitly advocating for additional rate increases and indicated that inflationary pressures are expected to diminish next year as the impact of recent economic disturbances subsides.
Gold is often regarded as a safeguard against inflation; however, elevated interest rates heighten the opportunity cost associated with holding non-yielding bullion, thereby diminishing its attractiveness to investors. Meanwhile, the Monetary Authority of Singapore announced its intention to introduce a vaulting service designed to securely store bullion for foreign central banks. Additionally, it plans to reduce taxes on certain companies operating within the gold market, aiming to enhance its competitive position in the precious metals trade.
