Why MCX Shares Hit 52-Week High Today? Gold and Silver ETFs Rally Up to 6% on Weaker US Dollar

Headline PPI was seen rising moderately but still below forecasts, implying that inflationary pressure could be less than anticipated in the short term. Bullion prices were consequently boosted by the development, as lower inflation expectations reduced the chances of hawkish interest rate hikes.

Weaker Dollar Lifts Bullion Demand

A weak US dollar helped fuel the gains seen in gold and silver prices. This is because a weaker US dollar will make it cheaper for those who use another currency to buy gold, thus increasing their demand. This normally results in increased precious metals prices and explains the strong ETF returns.

Geopolitical events, such as the continuing conflict between Iran and the US, were key in shaping inflation dynamics. However, expectations of better diplomatic relations between the countries lifted gold prices by more than 2%. Reduced oil prices further eased concerns about inflation.

Silver ETFs Outperform

Among the best performing securities in the trading session were the silver ETFs that recorded significant price hikes. This was because the Axis Silver ETF increased by 5.54%. On the other hand, ICICI Prudential Silver ETF went up by 5.43%, whereas the Kotak Silver ETF registered a gain of 5.66%.

Gold ETFs See Moderate Gains

The Gold ETFs also appreciated, but their performance was comparatively modest. Nippon India ETF Gold BeES appreciated by 2%, while ICICI Prudential Gold ETF increased by 1.5%. The Axis Gold ETF also grew by around 1.7%.

Funds such as UTI Gold ETF, Edelweiss Gold ETF, HDFC Gold ETF, Quantum Gold ETF, and DSP Gold ETF also maintained their positive momentum on the back of an increase in the price of gold.

MCX Shares Hit 52-Week High

Shares of Multi Commodity Exchange of India Ltd (MCX) climbed sharply, hitting a fresh 52-week high of ₹2,889 on the NSE. The stock rose 4.46%, tracking gains in precious metal prices.

The broader metal index also advanced by 2.2%, reflecting positive momentum across the sector.

Aluminium Prices Rise in Futures Market

The price of aluminium rose slightly on the futures exchange due to new positions taken up by the investors and stable consumption by consumer sectors. At the Multi Commodity Exchange, aluminium futures contracts maturing in May were quoted at ₹369.05 per kg, up ₹2.40, or 0.65%, in 133 lots.

The reason for this increase was said to be the positive trend in the spot market, as well as speculation.

Outlook Remains Mixed

Even then, things look quite balanced when viewed as a whole. Despite the positive performance of the precious metals, the fact that the reduction in interest rates will be postponed owing to higher levels of energy-based inflation is likely to restrain them.

In this regard, it should be said that the performance has reflected the high level of correlation among currencies, economic data, and the performance of commodities.