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Informist, Tuesday, Sept. 16, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of gold and silver Tuesday surged to record highs on the Multi Commodity Exchange of India, tracking gains in COMEX contracts on expectations of the US Federal Reserve lowering interest rates on Wednesday. On the COMEX, gold futures surged to a new record high and silver futures were near a 14-year high.

Gold contracts on both the exchanges had touched all-time highs early Tuesday and rose to fresh highs later in the day. At 1933 IST, the most-active October contract of GOLD on the MCX was 0.3% higher at INR 110,470 per 10 grams after touching a record high of INR 110,666 per 10 grams. The most-active December gold contract on the COMEX was 0.4% higher at $3,735.3 per ounce, after hitting a record high of $3,737.6 per ounce earlier in the day.

"The rally was supported by the US dollar falling to a 10-week low, while a string of weak labour data and muted inflation readings bolstered expectations of additional cuts this year," Kotak Securities said in a report. Recent disappointing economic data from the US, combined with Fed Chair Jerome Powell's comments at the Jackson Hole symposium last month, have raised expectations of a rate cut this month, triggering a rally in gold, which has hit record highs almost every other day.

The CME's Fedwatch tool shows traders fully pricing in a 25-basis-point cut by the Fed on Wednesday. Some market participants are betting on the Fed cutting the interest rate by 50 bps. Traders also expect 75 bps of cuts during the rest of the year. They will also closely track the FOMC's projections or 'dot plot'.

Concerns about the autonomy of the Fed have also raised the safe-haven appeal of the precious metal. "A monetary policy influenced by the government would increase longer-term inflation risks, as a look at Turkey today or back at the US in the 1970s shows," Carsten Fritsch, commodity analyst at Commerzbank, said in a report. "As a result, the reputation of the US dollar has been visibly undermined in recent months. Gold is correspondingly more in demand as a safe haven and store of value," Fritsch added.

A fall in the dollar index to an over-10-week low also supported prices of both the metals. At 1943 IST, the dollar index, which measures the strength of the greenback against a basket of six currencies, was at 96.88, down 0.5% from the previous close. A weaker dollar makes dollar-denominated commodities such as gold and silver cheaper for those holding other currencies, thereby increasing demand for such metals.

SILVER contracts on MCX surpassed the INR 130,000 per kg mark and rose to a record high of INR 130,450 per kg earlier in the day. At 1944 IST, the most-active December contract on the domestic exchange was 0.6% higher at INR 130,151 per kg while the same month contract on the COMEX was at $43.27 per ounce, up 0.7%.

"Since the beginning of the year, silver has gained nearly 50%, outperforming even gold. This means that it will likely become increasingly difficult for silver to continue to outperform," Fritsch said. However, silver prices are likely to rise as gold continues to appreciate, Fritsch said.

Outlook for the rest of the session:

--MCX gold seen at INR 109,169–INR 111,941 per 10 grams

--COMEX gold seen at $3,690.0–$3,760.0 an ounce

--MCX silver seen at INR 126,968-INR 132,598 per kg

--COMEX silver seen at $42.60-$43.80 an ounce

End

US$1 = INR 88.05

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Ashish Shirke

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