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Gold, Silver Soar as Oil Plunge Eases Inflation, Rate Hike Fears

Gold and silver prices posted strong gains on Tuesday, driven by a softer US dollar and a sharp decline in oil prices. The drop in energy costs followed remarks from US President Donald Trump suggesting a potential de-escalation of Middle East tensions, easing fears of persistent inflation. Lower inflation concerns could reduce the likelihood of aggressive central bank interest rate hikes, making non-yielding bullion more attractive to investors. Market attention now turns to key US inflation data due later in the week for further cues on monetary policy.

Key Points: Gold, Silver Prices Surge on Oil Drop, Inflation Outlook

  • MCX gold futures gain 1.15%
  • Silver futures surge 3.68%
  • Oil prices plunge over 10%
  • Dollar index softens 0.44%
  • Focus on upcoming US inflation data
2 min read

Gold, silver prices surge over decline in oil prices reducing inflation concern

Gold and silver prices rally as falling oil prices ease inflation concerns, impacting central bank rate hike expectations. Get the latest MCX and spot market updates.

"Gold has support at Rs 1,58,000 zone while resistance at Rs 1,75,000 and Rs 1,80,000 levels. - Analyst"

New Delhi, March 10

Gold and silver prices posted strong gains on Tuesday as the US dollar softened, and energy prices fell on signals from President Donald Trump that the conflict in the Middle East could be nearing an end.

MCX gold April futures gained 1.15 per cent to Rs 1,62,150 per 10 grams around 12.15 pm on an intraday basis. Meanwhile MCX silver May futures gained 3.68 per cent to Rs 2,77,000 per kg.

In international markets, spot silver climbed toward $82.50 per ounce, while spot gold rose to $5,082.51 per ounce.

The recovery followed US President Donald Trump's remarks suggesting potential de‑escalation with Iran, though he warned US military action could escalate if tanker traffic through the Strait of Hormuz remained blocked.

Analysts said that de-escalation of conflict could lead to lower energy costs, which could ease fears of inflation, potentially reducing chances of central banks raising interest rates, in turn supporting gold, which does not offer yields.

Oil prices declined sharply on Tuesday, as Brent futures declined as much as 10.85 per cent to an intraday low of $88.22 per barrel from the previous close of $98.96 per barrel. Around 11 am, they were trading at $92.50, down 6.44 per cent.

The dollar index dipped 0.44 per cent to 98.74, making greenback-backed bullion cheaper for buyers in overseas currencies.

Investors remain keen on cues from the US consumer price index for February, due on Wednesday, and the Personal Consumption Expenditures index, due on Friday to gauge US inflation and chances of Fed rate cuts.

Majority of traders currently expect the Fed to keep interest rates unchanged at the conclusion of its two-day policy meeting on March 18, according to several market watch tools.

"Gold has support at Rs 1,58,000 zone while resistance at Rs 1,75,000 and Rs 1,80,000 levels. MCX silver has support at Rs 2,50,000 and Rs 2,60,000, and resistance is at Rs 2,80,000 and Rs 3,00,000," an analyst said.

- IANS

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Reader Comments

R
Rohit P
The link between oil prices and gold makes sense. Lower oil means lower inflation, which is a huge relief for the common man. Petrol prices have been pinching our pockets for too long. If this brings some stability, it's welcome news.
A
Arjun K
While the short-term surge is positive, I feel the article focuses too much on international factors. What about domestic demand during the upcoming wedding season? That's a major driver for gold prices here. Local factors matter too.
S
Sarah B
Interesting analysis. As someone tracking markets from Mumbai, the support and resistance levels mentioned are crucial for traders. Silver's 3.68% jump is significant. The global cues are strong, but let's see if this holds post the US inflation data.
V
Vikram M
Chalo, some positive news! My mother has been waiting to buy gold for my sister's wedding. At ₹1,62,150 per 10g, it's still high but better than last week's peak. Hope the Middle East situation cools down for real, not just on paper.
K
Karthik V
The Fed's decision will be key. If rates stay unchanged, gold might get another boost. For Indian investors, the rupee-dollar equation is equally important. A weaker dollar helps, but we need a stable rupee too to truly benefit.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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