Gold and silver bounce back from multi-month lows as crude oil prices drop

Gold and silver prices rose in Monday's trade after hitting multi-month lows, helped by falling crude oil prices and a weaker US dollar. The December gold futures contract on the MCX gained ₹2,039 per 10 grams to reach a day's high of ₹1,40,524, after dropping to its lowest level since March in the previous session. Silver futures also went up by ₹5,543 per kg to touch ₹1,84,675. This recovery follows back-to-back monthly losses for silver, with October marking a steep 20% decline of ₹44,574 per kg and hitting a 10-month low. Brent crude futures dropped 7% to below $105 a barrel on Monday as hopes for a diplomatic solution to the US-Iran conflict eased supply fears. Iran announced it had a two-day plan to reopen the Strait of Hormuz and resume nuclear talks, following approval from its Supreme Leader. US President Donald Trump also stated he wanted to give diplomacy more time rather than take military action, telling Israeli Prime Minister Benjamin Netanyahu that he prefers negotiations. Meanwhile, the US dollar fell to around 101.6, marking its fourth straight day of losses. Despite Monday's gains, both precious metals remain far below their record peaks. Silver has dropped 56% from its record high of ₹4,20,048 per kg following a massive 170% surge in 2025. Gold has fallen ₹40,255 per 10 grams from its record peak of ₹1,80,779.

Context

Precious metals like gold and silver often move in response to changes in global energy prices, currency values, and geopolitical tensions. When crude oil prices fall and inflation worries ease, investor sentiment in commodities frequently shifts, while a weaker US dollar makes dollar-priced metals cheaper for buyers holding other currencies.