Gold prices surged in India on Monday, rising past Rs 1,44,000 per 10 grams in the domestic futures market a day after Diwali, as a softer US dollar, easing crude oil prices and sustained demand combined to lift precious metals.
The gold futures contract due to expire on December 4 rose Rs 1,848 to a high of Rs 1,44,400 per 10 grams on the Multi Commodity Exchange (MCX), compared with the previous closing of Rs 1,42,552. It was last seen trading at Rs 1,44,223, up Rs 1,671 or 1.17 per cent. Silver also rallied sharply, soaring more than Rs 4,200 to near Rs 1,89,499 per kilogram in early trade, before settling around Rs 1,88,102 per kg, up 1.62 per cent.
The rally in Indian bullion mirrored a strong recovery in international markets. Spot gold rose 1.6 per cent to $4,129.69 per ounce, while US gold futures for December delivery gained 1.6 per cent to $4,139 per ounce. Silver advanced more than 2 per cent to trade around $53.07 per ounce. The gains extended a recovery after a volatile period for precious metals, and came just a day after the Diwali festivities, when Indian households traditionally buy gold.
Retail gold prices in India also climbed. According to bullion.co.in, the 24-karat gold rate on November 9 was Rs 1,44,450 per 10 grams, while the 22-karat rate was Rs 1,32,504. The 20-karat rate stood at Rs 1,20,458 and the 18-karat rate at Rs 1,08,413.
Other trackers reported slightly lower figures, with one putting 24-karat gold at Rs 1,43,040 per 10 grams and 22-karat at Rs 1,31,120, reflecting the way retail rates vary by city and by source through the day. In major cities, 24-karat gold was priced at Rs 1,42,780 per 10 grams in Mumbai, Rs 1,42,540 in Delhi and Rs 1,43,200 in Chennai.
Several forces came together behind the surge. A softer US dollar made gold cheaper for buyers holding other currencies, while softer crude oil prices eased inflation concerns. Continued buying by central banks provided underlying support, and post-Diwali demand in India added a domestic push.
Analysts also pointed to the wedding season, which runs from October to February and is traditionally the strongest period for gold jewellery demand in India. Gold demand in the country peaks during the wedding season and festivals such as Dhanteras, Diwali and Akshaya Tritiya, often pushing prices 1 to 2 per cent above the level implied by international prices alone.
Amit Gupta, senior research head at Kedia Advisory, said international gold could test $4,160 to $4,220 if it sustains above $4,080, while MCX gold could move towards Rs 1,44,500 to Rs 1,46,000. His view reflects the market's reading that the rally has further to run if the dollar stays soft and demand holds up.
The international picture was more mixed as the day wore on. While spot gold climbed above $4,100 per ounce in early trade, later reports showed Comex gold easing around 0.09 per cent to $4,071.4 per ounce, with Comex silver down 0.24 per cent to $51.815 per ounce.
The intraday swing underlined how volatile bullion has become, with prices moving sharply on shifts in the dollar, US employment data, Treasury yields and expectations about the US Federal Reserve's next move on interest rates. Gold had declined in the previous session amid stronger-than-expected US employment data, a rising dollar index and higher Treasury yields, before recovering on Monday.
The role of the dollar and US interest rate expectations is central to how gold is priced. Gold is traded internationally in dollars, so when the dollar weakens, the metal becomes cheaper for buyers in other currencies, which tends to lift demand. Expectations that the US Federal Reserve might raise rates again had weighed on gold, because higher rates typically strengthen the dollar and make non-yielding assets like gold less attractive.
Monday's rally was driven in part by the dollar softening and those rate-hike expectations easing, a dynamic also noted by international market watchers tracking the metal's rise.
The domestic market told a steadier story. On the MCX, gold was trading at Rs 1,43,750 per 10 grams, up 0.84 per cent, in later trade. A stronger Indian rupee also helped lower the cost of imported gold, limiting some of the upside in domestic prices, even as international prices rose. India imports almost all of the gold it consumes, so the rupee-dollar exchange rate is a direct influence on what Indian buyers pay.
The surge has put the spotlight on gold's role in Indian households and portfolios. For Indian families, gold is both a cultural purchase and a store of value, bought for weddings and festivals and held as a hedge against inflation and uncertainty. For investors, the metal has been one of the strongest performers of the year, and the question now is whether the rally can be sustained.
Analysts caution that prices could remain volatile, with the direction of the US dollar, the Federal Reserve's policy stance and the pace of central bank buying all likely to matter more than any single day's move.
The gains also came after gold prices had edged higher during Diwali's special Muhurat trading session on Sunday. During that session, MCX gold futures for December delivery rose 0.27 per cent to settle at Rs 1,42,552 per 10 grams. Monday's rally built on that base, taking the metal to a fresh high for the post-Diwali period.
For buyers, the message is that gold is getting more expensive. A 10-gram piece of 24-karat gold that cost around Rs 1,42,552 at the close of the Muhurat session was trading at up to Rs 1,44,400 in early trade on Monday. For sellers and jewellers, the rise brings higher realisations but also the risk that higher prices will dampen demand in the weeks ahead, particularly if the wedding season buying slows.
The broader context is a year in which gold has repeatedly set new highs, driven by central bank purchases, investor demand for safe-haven assets and uncertainty over global growth and monetary policy. Silver, often called gold's more volatile cousin, has risen alongside it, gaining more than 2 per cent on Monday to trade above $53 per ounce internationally.
Whether the momentum continues will depend on the same factors that drove Monday's rally: the dollar, interest rate expectations and the appetite of buyers in India and China, the world's two largest gold-consuming nations.
For now, the post-Diwali surge has given gold holders reason to cheer and buyers reason to pause. The metal's next move will be watched closely in Mumbai's Zaveri Bazaar and in trading rooms around the world.
(Reporting based on The Daily Jagran and Business Today.)