Gold and silver prices traded in mixed directions on the Multi Commodity Exchange (MCX), with silver extending its gains while gold edged lower as investors booked profits following last week's sharp rally. Market attention shifted to upcoming US inflation data, which is expected to provide further cues on the Federal Reserve's interest rate outlook.

MCX silver futures climbed Rs 2,134 to settle at Rs 2,33,600 per kilogram. Meanwhile, gold futures declined Rs 360 to Rs 1,51,461 per 10 grams. MCX precious metals contracts are rupee-denominated instruments that track international benchmark prices on exchanges such as COMEX and the London spot market, with domestic rates reflecting global moves adjusted for the dollar-rupee exchange rate and import duties.

The divergence between the two precious metals comes against a backdrop of heightened geopolitical tensions related to the Iran conflict, which has historically supported demand for safe-haven assets. Gold's pullback suggests some investors are locking in gains after the metal's recent strong run, while silver's continued upward momentum indicates sustained buying interest in the industrial precious metal. Silver demand has been underpinned in recent years by its growing use in solar photovoltaic manufacturing and electronics, sectors that have steadily increased global consumption of the metal.

The upcoming US inflation report is a key focal point for commodity traders, as the Federal Reserve's monetary policy stance directly influences non-yielding assets like gold and silver. Higher-than-expected inflation figures could reinforce expectations of a more hawkish central bank approach, potentially pressuring precious metals, while softer data may strengthen the case for rate cuts and support prices. Traders are also watching the Fed's next policy meeting and any updated projections from the Federal Open Market Committee for signals on the trajectory of interest rates through the remainder of the year.

Source: Economic Times Markets