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Informist, Friday, Sept. 19, 2025

By Reshma Ravi

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and COMEX rose Friday after settling lower in the previous session. Gold prices rose as the US Federal Reserve's first rate cut of the year fuelled optimism over further easing, analysts said. Robust central bank purchases and rising safe-haven demand due to global uncertainties also supported gold prices.  

At 1631 IST, the most-active October GOLD contract on the MCX was up 0.2% at INR 109,307 per 10 grams. The most-active December GOLD contract on the COMEX was up 0.3% at $3,688.3 per ounce.

"Traders are still pricing in almost two more rate cuts (in the US) this year, with the expectation of Fed monetary easing a major catalyst in bullion's 39% surge this year," Kotak Securities said in a report. Traders now price in a 92% probability of a 25-basis-point rate cut in the October meeting of the US Federal Open Market Committee, according to CME's Fedwatch tool. Lower interest rates increase the appeal of non-interest-yielding precious metals.

The Fed's projections indicate a median outlook of two more rate cuts by year-end, but the FOMC is divided on this issue, with only a narrow majority supporting that view, Commerzbank said in a report. "A considerable number of FOMC members see no need for further interest rate cuts this year," Commerzbank said. "For next year, the median projection is for only one interest rate cut," it said.

On Wednesday, the US FOMC cut the federal funds target rate range by 25 basis points to 4.00-4.25%, as widely expected. US Fed Chair Jerome Powell described Wednesday's cut as a step in "risk management," stressing that it was not mainly to counter economic weakness. Members also said that policy decisions would be made "meeting by meeting" and warned that "there's no risk-free path" ahead.

Thursday, gold prices fell as investors interpreted Powell's remarks as less dovish than the market had anticipated. Although the rate decision and projections matched expectations, it was the tone of the panel and Powell that had caused investors to scale back aggressive rate cut bets, analysts said. 

SILVER contracts rose on MCX and COMEX. At 1643 IST, the most-active December silver contract on the MCX was up 0.8% at INR 128,190 per kilogram. The same-month contract on COMEX was up 0.8% at $42.27 per ounce.

Outlook for the rest of the session:

--MCX gold seen at INR 108,040–INR 110,714 per 10 grams

--COMEX gold seen at $3,650.0–$3,710.0 an ounce

--MCX silver seen at INR 125,019-INR 131,481 per kg

--COMEX silver seen at $41.80-$42.80 an ounce

End

US$1 = INR 88.09

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

Edited by Saji George Titus

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