MCX silver and crude oil futures climb higher after Fed cuts interest rate by 50 bps

MCX silver and crude oil futures saw solid gains on Thursday after the US Federal Reserve announced that it would cut interest rate by 50 bps. Meanwhile, gold futures saw moderate gains and the base metal futures were trading in the green as well.

Precious metals

Gold futures on the MCX were trading higher by 0.52% at ₹73,438 per 10 grams. The interest rate cut makes the non-yielding yellow metal more attractive.

Meanwhile, silver futures on the MCX were considerably higher with gains of 2.25% and were trading at ₹90,282 per kg. The metal had hit an intraday high of ₹90,600 and was off its day’s low of ₹88,255.

Base metals

Base metals were trading higher on Thursday with copper futures on the MCX trading higher by 0.80% at ₹815.45. Meanwhile, zinc futures were up 1.18% to trade at ₹269.70. Lead futures were trading higher by 0.49% at ₹184.85. With lower interest rates, an uptick in manufacturing and consumption is witnessed. As a result, it is possible that the demand for base metals will increase.

Crude oil and natural gas

MCX crude oil futures on Thursday were trading higher by 0.95$ at ₹5,969 per barrel. Crude oil prices were driven higher on the back of the interest rate cut. However, sentiments were weighed down as weak demand from China has been a pressing concern.

Natural gas futures on the MCX were down 0.47% on Thursday and were trading at ₹192.4.

Economic data

The US Federal Reserve announced that it would cut interest rates by 50 bps and would cut rates twice more in 2024 with more rate cuts in the coming year. However, the rate cut also signaled a softening labour market in the US which would result in a more widespread economic slowdown.

Going ahead, traders and investors will be looking at the Bank of Japan’s meeting Friday to get insights on the central bank’s plan to raise interest rates. Additionally, the People’s Bank of China’s monetary decision will also be on the radar of market participants.