Gold and silver prices witnessed sharp volatility in the Indian market on Friday, September 11, as both precious metals came under pressure during the session before recovering from their intraday lows. The sudden rebound highlighted the nervous trading conditions prevailing in the bullion market amid changing expectations around global interest rates, inflation and geopolitical risks.
On the Multi Commodity Exchange (MCX), gold for the October contract fell to an intraday low of around ₹1,50,695 per 10 grams before recovering during the session. The contract later traded around ₹1,52,795, showing a significant recovery from the day's low. Silver also witnessed heavy selling initially, touching approximately ₹2,30,270 per kilogram before recovering towards ₹2.34 lakh.
Silver Sees Sharp Intraday Recovery
Silver remained particularly volatile during Friday's trading session. After falling to nearly ₹2.30 lakh per kilogram, the metal recovered as buying interest returned to the market. MCX data showed silver moving between approximately ₹2,30,270 and ₹2,34,453 during the day.
The movement reflects the heightened sensitivity of silver to both investment demand and developments in the international commodities market. Unlike gold, silver also has significant industrial demand, which can add another layer of volatility when global economic expectations change.
Recent trading has shown that silver can move by several thousand rupees within a single session. The metal had also experienced a sharp decline earlier in the week, reinforcing expectations of continued volatility in the near term.
Gold Recovers From ₹1.50 Lakh Level
Gold also witnessed a notable recovery after coming under pressure during the opening part of the session. MCX gold touched around ₹1,50,695 per 10 grams before moving back above the ₹1.52 lakh level. The contract was trading around ₹1,52,795 during the session.
The recovery came despite continued pressure from global economic signals. International gold prices also rebounded on Friday, with spot gold rising more than 1% after recent declines. However, the precious metal remained on course for a weekly decline, reflecting the broader pressure that has affected bullion markets during the week.
US Inflation Data Remains Important
One of the major factors influencing precious metals has been fresh US inflation data and expectations surrounding the Federal Reserve's interest-rate policy. Higher interest rates generally make non-yielding assets such as gold less attractive because investors can obtain better returns from interest-bearing assets.
Reuters reported that US consumer prices rose 0.4% in August, while market participants significantly increased expectations of a Federal Reserve rate hike at the upcoming meeting. The changing interest-rate outlook has contributed to volatility in gold and silver prices.
At the same time, geopolitical tensions and movements in the US dollar continue to influence the international bullion market. Any significant change in expectations regarding inflation, monetary policy or global risk can quickly translate into price movements in Indian commodity markets.
Domestic Market Remains Volatile
Domestic bullion prices have also been moving sharply over the past several sessions. On September 10, both gold and silver came under pressure on MCX, with silver falling by around ₹1,500 per kilogram and gold slipping towards the ₹1.53 lakh level.
By Friday, the market again saw a wide trading range, with both metals falling sharply before recovering part of their losses. Such movements indicate that traders are closely watching international economic data rather than relying solely on domestic demand trends.
For retail buyers, it is also important to remember that MCX futures prices and jewellery-market prices are not identical. Retail gold prices vary depending on purity, local taxes, making charges and other costs. The India Bullion and Jewellers Association's indicative rates, for example, showed 24-carat gold at around ₹1,53,018 per 10 grams on September 11, while 999-purity silver was around ₹2,29,900 per kilogram.
What Could Happen Next?
Market participants are likely to remain cautious as precious metals continue to respond to international economic data and central-bank expectations. Gold may continue to receive support from geopolitical uncertainty and safe-haven demand, while higher interest-rate expectations could keep a lid on gains.
Silver is likely to remain even more volatile because its price is influenced by both investment demand and industrial consumption. A change in expectations for global economic growth could therefore produce larger moves in silver compared with gold.
For now, Friday's recovery shows that buyers remain active at lower levels, but the wider trend remains sensitive to global developments. Investors and consumers should therefore distinguish between a short-term rebound and a sustained change in the direction of precious-metal prices.
Journalist: Vijay Singh