Muthoot Finance, Manappuram Finance shares rally up to 11% in 4 days as gold crosses Rs 1.63 lakh

Shares of gold loan providers, including Muthoot Finance, Manappuram Finance and IIFL Finance, extended their gains on Monday as gold prices continued to climb, supported by a weaker dollar and continued strength in gold prices.

Muthoot Finance, Manappuram Finance and IIFL Finance provide loans with gold as collateral. Muthoot Finance and IIFL Finance shares jumped 11% in four days to day’s high of Rs 3,181 and Rs 698 respectively while Manappuram Finance gained over 9% over the past four sessions to day’s high of Rs 369.

Gold prices have been recording sharp gains since Thursday after a surprise liquidity support announcement by the US Treasury pushed yields and the dollar lower.


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Silver prices snapped a 3-day gaining streak, while gold rose for a fourth straight session on the MCX on Monday supported by a weaker dollar, while investors turned their attention to key US inflation data and a speech by Federal Reserve Chair Kevin Warsh later this week.

In the last four sessions, gold has risen nearly Rs 8,200/10 grams and Gold futures for October 2026 delivery rose by Rs 1,000 to Rs 1,63,434 per 10 grams. Silver snapped a 3-day gaining streak and in the domestic market, MCX silver futures for September 2026 delivery were down Rs 1,782 to Rs 2,44,815 per kg.

The dollar remained near multi-month lows as markets reacted to the US Treasury's plan to buy back more long-term bonds. A weaker US dollar makes gold, which is priced in the greenback, cheaper for buyers holding other currencies.

Investors will closely track the July Personal Consumption Expenditures (PCE) price index data and Warsh's speech at the Jackson Hole symposium this week for fresh signals on the outlook for US interest rates.

On the geopolitical front, the US threatened Iran with what it described as "the greatest financial offensive ever marshalled" as it prepared to introduce economic sanctions targeting Iran's trade partners. Oil prices fell by more than $1 a barrel as investors booked profits ahead of the expected announcement.

What’s driving the surge in gold prices?

The US Treasury Department earlier this week announced that it would double the size of liquidity support buyback operations for longer-dated notes and bonds. The US dollar meanwhile remained muted, making the American greenback-priced metals cheaper for buyers ⁠holding other ‌currencies.

Markets are now pricing in a 64% probability that the Fed will leave interest rates unchanged in September, while the probability of a rate hike stands at 36%, according to the CME FedWatch Tool. Gold is traditionally viewed as a hedge against economic turmoil and inflation, but higher interest rates can weigh on demand for the non-yielding asset.

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Meanwhile, the geopolitical turmoil continues to boil in the Middle East. US Treasury chief Scott Bessent said the United States will impose "the toughest sanctions in history" on Iran, adding that the move could reduce the need for new major military operations.

This comes after US President Donald Trump has warned of economic consequences against any country that provided "any type of lifeline to Iran". In a message posted on social media on Wednesday evening, Trump promised "Economic Warfare and Isolation on an unprecedented scale," although details were scant. Iran has faced continuous punitive economic sanctions for nearly 50 years, since the Islamic Revolution of 1979.

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