Bullion trading opened the week on a positive note on Monday, with both gold and silver registering notable upward movement in domestic futures trading. A confluence of persistent geopolitical tension across the Middle East and a softening US dollar prompted market participants to direct capital back toward safe-haven instruments. The price action unfolded even as global crude oil benchmarks experienced sharp pullbacks, indicating that underlying systemic concerns continue to outweigh the immediate relief provided by falling energy costs.
Domestic Gold Futures and Spot Market Trends
On the Multi Commodity Exchange (MCX), gold contracts slated for expiry on August 5, 2026, demonstrated solid momentum during morning trading. By approximately 10:29 am IST, the benchmark contract was changing hands at Rs 1,44,000 per 10 grams, marking an advance of Rs 894, or 0.62%, compared to its previous closing price of Rs 1,43,106. The contract had kicked off the trading session at an opening level of Rs 1,43,575 per 10 grams.
In tandem with futures trading, physical bullion markets mirrored the firm tone. Spot gold prices were quoted at Rs 75,340 per 10 grams. Market sentiment remains largely tied to macroeconomic signals and expectations surrounding upcoming central bank deliberations, as investors evaluate whether current price levels can sustain their upward trajectory.
Silver Outperforms with Gains Approaching One Percent
Silver prices experienced an even stronger surge on Monday morning, gaining nearly 1% on the domestic derivatives exchange. The MCX silver futures contract expiring on September 4, 2026, surged by Rs 2,184, or 0.98%, to trade at Rs 2,24,322 per kg around 10:29 am IST. This followed an opening figure of Rs 2,23,500 per kg and a previous settle of Rs 2,22,138 per kg.
In the physical market, spot silver was recorded at Rs 90,951 per kg. The broader strength across precious metals highlighted renewed risk aversion among market participants, who sought refuge in tangible assets amidst shifting global trade and financial dynamics.
Geopolitical Factors and the Impact of Crude Oil Pullbacks
The primary driver behind the persistent demand for precious metals remains the ongoing volatility in the Middle East. Although reports indicated that both Washington and Tehran over the weekend agreed to a temporary pause in direct military strikes, market observers remain cautious regarding long-term stability in the region.
This pause in military actions triggered a significant retreat in energy prices, with both Brent crude and West Texas Intermediate (WTI) plunging by more than 5%. While cheaper oil typically helps temper global inflationary expectations, the relief was offset by persistent geopolitical risks that continue to keep precious metal buying active. Furthermore, a softening US dollar made dollar-denominated assets relatively more attractive to international purchasers, reinforcing the floor for precious metals.
Federal Reserve Interest Rate Expectations and Technical Levels
Beyond geopolitical developments, financial markets are closely scrutinizing the monetary policy outlook of the US Federal Reserve. Investors are eagerly awaiting official rate decisions to assess the future direction of real yields and currency valuations, both of which exert direct influence on bullion valuations.
"Markets now await next week's Fed meeting, where rates are expected to stay unchanged," said Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions Ltd. and President of IBJA.
Elaborating on market expectations, Kothari pointed out that market pricing currently reflects an 81% probability of an interest rate hike in September. From a technical standpoint, he outlined critical chart levels for both metals, noting that gold faces fundamental support near $4,000 per ounce and resistance around $4,200 per ounce. For silver, key technical zones have been identified at $55 for support and $63 for resistance, parameters that are expected to dictate the commodity pair's broader direction in upcoming sessions.
