Gold and Silver Futures Rebound After Significant Sell-Off Amid Geopolitical Tensions

Gold and silver prices rebounded on Thursday in futures trading after experiencing significant declines earlier in the week. Traders engaged in value buying amid ongoing geopolitical uncertainties. Analysts highlighted that the prolonged US-China trade tensions remained a focal point for investors. Washington is reportedly considering new export restrictions ahead of high-level negotiations and a potential meeting between President Donald Trump and Chinese President Xi Jinping at the APEC summit in South Korea next week.

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On the Multi Commodity Exchange (MCX), gold for December delivery surged by Rs 2,093, or 1.72%, to Rs 1,23,950 per 10 grams. The contract reached a session high of Rs 1,24,233. Silver futures for December delivery also gained, rising Rs 3,532, or 2.43%, to Rs 1,49,090 per kilogram. The March 2026 contract climbed Rs 4,153, or 2.83%, to Rs 1,50,771 per kg, regaining the Rs 1.5 lakh mark.

Gold and Silver Market Trends

Gold prices on the MCX recovered after a sharp sell-off earlier this week. This decline was driven by heavy profit booking from overbought levels and renewed optimism around US trade talks with India and China. Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities, noted that this marked one of the most significant corrections in months, nearly 5%. He added that uncertainty over shifting US presidential policy views led to a modest rebound as investors looked to re-enter at lower levels.

The upcoming US Consumer Price Index (CPI) data remains a crucial factor for near-term direction. On Wednesday, gold futures had plunged Rs 6,414, or 5%, to close at Rs 1,21,857 per 10 grams. Meanwhile, silver dropped Rs 4,769, or 3.17%, to Rs 1,45,558 per kilogram as profit-booking intensified after a strong rally.

Impact of Global Market Movements

The sharp correction coincided with gains in the US dollar and fading safe-haven demand as global risk appetite improved. Commodity markets were closed during the first half of Wednesday for Diwali and resumed trading in the evening session. On Tuesday, a special Muhurat trading session was conducted by stock and commodity exchanges to mark the beginning of Samvat 2082 this year.

During this symbolic one-hour Muhurat trading session across BSE, NSE, MCX and NCDEX, gold futures depreciated by Rs 2,353 or 1.8% to finish at Rs 1,28,271 per 10 grams against Monday's closing of Rs 1,30,624 per 10 grams. Silver also slumped by Rs 7,660 or 4.85% to end at Rs 1,50,327 per kg on Tuesday from the previous close of Rs 1,57,987 per kilogram on the MCX.

International Market Dynamics

On Friday last week, gold and silver touched record highs on the MCX with gold reaching Rs 1,32,294 per 10 grams and silver hitting Rs 1,70,415 per kilogram respectively. In the international market on Thursday Comex gold futures for December delivery rose by 2.26% to USD 4,157.31 per ounce after falling by 1.06% in the previous session.

Earlier in the week gold had plunged nearly 6% -- its biggest one-day drop in over a decade -- after Trump adopted a conciliatory tone on trade and signalled expectations of a strong and fair deal with China. Silver futures for December delivery overseas also rebounded nearly 3% to USD 49.03 per ounce on Thursday supported by improved risk appetite.

The white metal settled marginally lower at USD 47.68 per ounce on Wednesday. It had plunged by 7.16% to settle at USD 47.70 per ounce on Tuesday marking its worst day since 2021 from an all-time high of USD 53.76 per ounce last week before retreating sharply amid profit booking and a liquidity squeeze in London's silver market.

With inputs from PTI