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Informist, Wednesday, Oct. 8, 2025

 

By Reshma Ravi

 

MUMBAI – Futures contracts of gold and silver hit record highs on the Multi Commodity Exchange of India Wednesday, tracking the gains in COMEX due to increasing safe-haven demand following the US government shutdown and political uncertainties in some countries. Prices were also supported by growing expectation of an additional US Federal Reserve rate cut in October and December.

 

At 1550 IST, the most-active December contract of GOLD on the MCX rose 1.5% to INR 122,942 per 10 grams after touching a record high of INR 123,080 per 10 grams. The most-active December gold contract on COMEX was up 1.6% at $4,069.3 per ounce, after hitting a record high of $4,071.5 per ounce earlier in the day.  

 

The US government shutdown has delayed most of the economic data, casting uncertainty on the economic outlook. The shutdown has entered its second week, with no signs of it ending in the near future. This has further increased the expectations of a rate cut by the Fed at its October meeting. According to the CME FedWatch tool, around 95% of traders are pricing in a 25-basis-point rate cut in October and around 5% expect the rate to remain unchanged at 4.00-4.25%. Lower interest rates increase the appeal of the non-interest-yielding precious metals.

 

"Political instability in France and Japan has also added to the global risk sentiment," Kedia Advisory said in an email note. The newly appointed France Prime Minister Sebastien Lecornu resigned on Monday after struggling to pass a budget through the fractured French Parliament amid a debt crisis. In Japan, Sanae Takaichi, considered a fiscal dove, was elected to lead the ruling party and become the next prime minister. 

 

Meanwhile, the People's Bank of China increased its gold holdings for the 11th consecutive month, with reserves at 74.06 million ounces by September end, Kedia Advisory said. On Wednesday, New Zealand's central bank cut its interest rate by 50 basis points, which also caused gold prices to rise, analysts said.  

 

Market participants await comments from the Federal Open Market Committee members such as Alberto Musalem and Lorie Logan later in the day, for further cues on US Fed rate cuts. They are also waiting for minutes of the FOMC's September meeting.   

 

SILVER contracts hit another record high on MCX. At 1616 IST, the most-active December contract on the domestic exchange was up 2.0% at INR 148,750 per kg, after hitting a record high of INR 149,138 per kg. The same-month contract on COMEX was at $48.58 per ounce, up 2.2%.

 

Outlook for the rest of the session:

--MCX Dec gold seen at INR 120,800–INR 126,000 per 10 grams

--COMEX Dec gold seen at $3,980.0-$4,140.0 an ounce

--MCX Dec silver seen at INR 144,400-INR 153,100 per kg

--COMEX Dec silver seen at $47.00-$50.00 an ounce

End

 

US$1 = INR 88.80

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

 

Edited by Akul Nishant Akhoury

 

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