Gold and silver prices recovered sharply on Wednesday after the U.S. Federal Reserve decided to keep interest rates unchanged, which weakened the dollar and Treasury yields. Gold futures surged to an intraday high of $4,115, while silver prices climbed to $59.40, according to livemint.com. In the domestic market, MCX gold futures rose by ₹1,500 per 10 grams to reach an intraday peak of ₹1,42,097, regaining losses from the previous day.
The recovery in precious metals followed the Fed's announcement to maintain the benchmark interest rate, which reduced the appeal of the dollar as a safe haven. This move led to a decline in the dollar index and U.S. Treasury yields, prompting investors to shift towards gold and silver as alternative assets. Geopolitical tensions also contributed to the increased demand for these metals, further supporting the price rebound, livemint.com reported.
This price movement is significant amid ongoing global economic uncertainties and inflation concerns. The Fed's decision to hold rates steady contrasts with previous tightening cycles that pressured commodity prices. The rebound in gold and silver aligns with patterns seen during periods of monetary policy pauses, where investors seek refuge in tangible assets. The domestic market's swift recovery in MCX gold futures highlights India's sensitivity to global monetary developments and its role as a major consumer of precious metals.
On Wednesday, the MCX gold futures contract fully recovered the ₹1,440 loss from Tuesday, reaching ₹1,42,097 per 10 grams, as per livemint.com. This marked a notable intraday recovery driven by the Fed's policy stance and currency fluctuations.