Gold Edges Lower, Silver Gains as Oil Retreats Below $104

Gold opened Friday on a subdued note, while silver moved higher as traders weighed a retreat in crude oil against a dollar that is still set for a weekly gain. 

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

On the MCX, October gold futures were at ₹1,52,861 per 10 grams around 9:10 am, down 0.08%. December silver futures were up 0.49% at ₹2,39,380 per kg. 

The moves came alongside some relief in the oil market. Brent crude slipped 1% and fell below $104 a barrel. The dollar was little changed in early trade, although it remained on course to gain more than 1% for the week. 

Gold was also marginally weaker overseas. US December futures slipped 0.10% to $4,380.95 an ounce. 

For bullion, the backdrop has become more complicated after a series of interest-rate decisions this month. 

The US Federal Reserve raised rates by 25 basis points on September 16. The European Central Bank has also lifted its key deposit rate by 25 basis points in September, while the Bank of Japan raised rates to 1.25%, their highest level in 31 years. The Bank of England left rates unchanged. 

That leaves gold caught between two opposing forces. Higher interest rates can make a non-yielding asset such as gold less attractive, while geopolitical uncertainty tends to draw investors towards it during periods of stress. 

The US-Iran conflict has made that balance less straightforward. Apart from the uncertainty created by the war itself, its impact on crude prices has become important for bullion. A prolonged spell of expensive oil could keep inflation elevated and leave central banks with reason to maintain tighter monetary policy. 

Oil was moving the other way on Friday morning, however, with Brent easing below $104. 

With the Federal Reserve’s September decision now behind the market, attention is shifting to upcoming US economic data and developments in the US-Iran conflict. For the opening hours of Friday’s trade, gold remained slightly weaker on the MCX while silver held above the previous session’s level.