Gold and Silver Rebound as Fed Rate Hike Drives Dollar and Yield Volatility

Mumbai, Sept 19: Gold and silver prices recovered sharply towards the end of the week after falling heavily following the US Federal Reserve’s interest-rate decision on 16 September. Spot gold rose 0.7% to $4,372.27 per ounce on Friday and was up around 0.6% for the week, while spot silver jumped 2.3% to $66.69 per ounce on Friday. In India, 24-carat gold was quoted at around ₹15,442 per gram, while silver was around ₹2.50 lakh per kilogram. 

The week saw precious metals move between pressure from higher US interest rates and a stronger dollar, and support from geopolitical uncertainty and easing crude oil prices. The US dollar index rose above 100, while Brent crude retreated after trading above $109 a barrel earlier in the week. 

Fed Raises Rates 25 Basis Points as Gold Falls to Six-Week Low 

The US Federal Reserve’s policy decision on Wednesday, 16 September, was the biggest catalyst for precious-metal prices during the week. The central bank raised its federal funds target range by 25 basis points to 3.75%–4.00%. 

The rate increase initially triggered selling across precious metals. Higher interest rates can increase the opportunity cost of holding gold and silver because neither asset provides a regular interest payment. The immediate reaction was therefore a sharp decline in bullion prices. 

Spot gold fell to approximately $4,234.68 per ounce on 16 September, marking a near six-week low. Silver also came under heavy pressure and touched an intraday low of around $61.90 per ounce. 

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The US dollar strengthened at the same time, adding another layer of pressure on dollar-denominated bullion. The dollar index reached approximately 100.33, its highest level since the end of July. 

The initial decline was followed by a rapid recovery. Spot gold rebounded around 1.1% to $4,310.49 per ounce on Thursday, 17 September, as selling pressure eased and short positions were unwound. 

The sharp reversal meant that the Federal Reserve decision did not produce a sustained decline in precious metals. Instead, gold and silver experienced significant two-way volatility as traders reassessed the implications of the rate increase. 

US Bond Yields Stay Elevated as Higher Rates Pressure Precious Metals 

US Treasury yields also remained elevated after the Federal Reserve’s decision. The 10-year Treasury yield stayed close to the 5% level, keeping attention on the relative attractiveness of interest-bearing assets compared with gold. 

Gold does not provide an interest payment, so higher bond yields can reduce its relative appeal. This relationship contributed to Wednesday’s decline when the Fed raised rates and the dollar strengthened. 

However, yields did not prevent the subsequent recovery in bullion. Gold prices responded not only to interest-rate expectations but also to geopolitical uncertainty, crude oil movements and positioning in the futures market. 

The week therefore demonstrated that the relationship between yields and gold is not always immediate or one-directional. A rise in yields can create pressure, but safe-haven demand and expectations surrounding future monetary policy can offset that pressure. 

The movement in US yields also affected broader financial markets during the week. Investors continued to assess whether tighter monetary conditions would influence economic activity, inflation and demand for commodities. 

For precious metals, the combination of elevated yields and a stronger dollar remained a source of resistance, while geopolitical uncertainty and changing market positioning provided counterbalancing support. 

MCX Gold Ends Near ₹1.53 Lakh as Silver Reaches ₹2.41 Lakh 

Domestic futures prices also remained volatile following the global sell-off and recovery. The October gold futures contract on the Multi Commodity Exchange (MCX) was reported around ₹1,53,940 per 10 grams, while December silver futures were around ₹2.41 lakh per kilogram. 

October gold had opened the week near ₹1,52,250 per 10 grams and moved to an estimated low of ₹1,51,900 before recovering towards the end of the week. The contract reached approximately ₹1,54,350 during Friday’s trading. 

December silver futures traded within an estimated weekly range of approximately ₹2.35 lakh to ₹2.42 lakh per kilogram. The movements in domestic futures broadly followed international bullion prices. Gold’s sharp fall on Wednesday was mirrored in Indian markets, followed by a recovery as international prices rebounded. 

Also Read: How to Invest in Gold for Beginners: Simple Start Guide 

The rupee’s movement around ₹91.5 per dollar also influenced the conversion of international bullion prices into Indian futures. Because India imports a significant portion of its gold and silver requirements, currency movements remain relevant to domestic commodity prices. 

Trading activity remained elevated during the week as the Federal Reserve decision produced large intraday price movements. Silver experienced particularly sharp swings because of its combination of investment and industrial demand. The late-week recovery allowed both metals to regain part of the ground lost immediately after the US central-bank decision. 

Indian 24-Carat Gold Rises as International Prices Recover 

Domestic gold prices ended Friday higher after the international bullion market recovered from its mid-week decline. 24-carat gold was quoted at approximately ₹15,442 per gram, an increase of around ₹158 from the previous session. 

The movement in domestic prices broadly reflected the recovery in international gold. The rupee’s relatively stable position against the dollar also meant that the late-week international recovery translated into higher Indian prices. 

Gold prices in India can differ between cities because of local taxes, dealer premiums, transportation costs and differences in physical-market demand. As a result, national reference rates and city-level retail quotations may not always be identical. 

Also Read: How to Invest in Gold Online 

The domestic market remained sensitive to the large international price swings seen during the week. Buyers faced a sharp fall following the Fed decision and then a quick recovery, making price discovery more volatile. 

The elevated level of gold prices also affected physical demand. Buyers remained cautious, particularly as they assessed whether the post-Fed decline would return or whether the recovery would continue. 

This caution was visible despite the approach of India’s festive and wedding-demand period, when physical gold purchases traditionally receive greater attention. 

Silver Reaches ₹2.50 Lakh as Domestic Prices Follow Global Recovery 

Silver prices also recovered towards the end of the week. Domestic quotations were around ₹2,50,000 per kilogram on Friday, although rates varied slightly between cities and data providers. 

Mumbai, Delhi, Kolkata, Jaipur and Pune were reported around the ₹2.50 lakh per kilogram level, while Chennai and Hyderabad were around ₹2,49,900 per kilogram. 

The differences between quotations reflect the way individual market participants and data providers calculate local prices. Dealer premiums and regional market conditions can also cause small variations. 

Silver’s international recovery was stronger than gold’s during Friday trading, with spot silver gaining approximately 2.3% to $66.69 per ounce. 

Also Read: How to Invest in Silver: 6 Best Ways (2026) 

The metal’s performance reflected both precious-metal demand and its industrial applications. Silver is widely used in electronics, solar technology and other industrial processes, giving its price a broader set of influences than gold. 

The sharp decline to around $61.90 on Wednesday followed by the move towards $66.69 on Friday highlighted the metal’s higher short-term volatility. 

Domestic silver prices consequently remained sensitive to both international futures movements and changes in the rupee. 

Gold Recovers as Short Covering Offsets Higher Rate Pressure 

The recovery in gold after Wednesday’s sell-off was partly linked to changes in market positioning. The metal had fallen sharply immediately after the Fed announcement, creating conditions for traders holding short positions to close those positions as prices stabilised. 

Gold’s move from approximately $4,234.68 on 16 September to $4,310.49 on 17 September and then towards $4,372.27 on Friday represented a substantial recovery within only two trading sessions. 

The move also demonstrated the importance of expectations surrounding central-bank policy. A large part of the market’s reaction to a rate decision can occur before the announcement if investors have already positioned themselves for a particular outcome. 

Once the decision becomes known, prices can reverse if the actual announcement does not produce the additional selling pressure that traders had anticipated. 

In this case, the stronger dollar and higher rates initially pushed bullion lower, while subsequent stabilisation in currencies, bonds and oil helped prices recover. 

Silver followed a similar pattern but recorded a stronger late-week rebound, reflecting its additional industrial-demand component. 

Indian Gold Demand Stays Subdued as Buyers Wait for Lower Prices 

Physical gold demand in India remained subdued during the week as buyers waited for greater price stability and potentially lower prices. 

The sharp international decline following the Federal Reserve decision did not immediately translate into strong physical buying. Retail customers and jewellers remained cautious because prices subsequently recovered rapidly. 

High domestic prices also continued to influence purchasing decisions. Import-related costs, taxes and dealer premiums mean that Indian consumers do not always experience the full extent of international price declines. 

Jewellers were also approaching the festive season, when demand can normally increase. However, the week’s volatility made it difficult for buyers to determine whether prices had established a near-term floor. 

Chinese physical-market demand remained comparatively steady, with premiums supported by investment demand. The difference between Indian and Chinese buying conditions highlighted the varied regional response to elevated international bullion prices. 

The subdued Indian demand also meant that domestic price movements were driven more heavily by international bullion markets and currency movements during the week. 

Middle East Tensions Support Gold As Falling Oil Reduces Inflation Pressure 

Geopolitical developments in the Middle East provided another source of volatility for precious metals during the reporting period. 

Concerns surrounding US-Iran tensions and risks involving Saudi oil infrastructure supported safe-haven demand for gold. Geopolitical uncertainty can increase demand for assets traditionally viewed as stores of value during periods of financial or political stress. 

At the same time, crude oil prices eased towards the end of the week. Brent crude, which had moved above $109 a barrel earlier in the period, declined towards approximately $103.3 a barrel by Friday. 

Lower oil prices reduced some concerns about an additional inflationary shock. This created conflicting forces for gold: geopolitical uncertainty supported demand, while easing energy prices reduced part of the inflation-related pressure that can influence bullion markets. 

The decline in oil also contributed to the broader stabilisation in financial markets towards the end of the week. 

Gold ultimately ended the week higher despite the initial impact of the Fed rate hike, showing that monetary-policy pressure was offset by a combination of position adjustments, geopolitical concerns and changes in commodity and currency markets. 

Gold and silver remained sensitive to US monetary policy, dollar movements, Treasury yields, crude oil prices and geopolitical developments during 14–18 September. Spot gold ended near $4,372.27, while silver reached $66.69. In India, 24-carat gold was around ₹15,442 per gram, with silver near ₹2.50 lakh per kilogram. 

Source 

• https://silverprice.org/silver-price-india.html 
• https://goldprice.org/gold-price-india.html