Shares of gold loan companies and precious metals producer Hindustan Zinc advanced on Friday as a sharp rally in global gold and silver prices boosted sentiment across the precious metals space. Muthoot Finance climbed nearly 4 percent, while Manappuram Finance and Hindustan Zinc also traded firmly higher as bullion prices headed for weekly gains.

At around 3:10 pm, Muthoot Finance surged 3.7 percent to Rs 3,058.70, making it one of the top gainers in the broader market. Manappuram Finance gained 1.9 percent to Rs 329.15, while Hindustan Zinc rose 1.6 percent to Rs 537.30.

The strength was reflected across precious metal investment products as well. Gold and silver exchange-traded funds (ETFs) gained up to 3 percent during the session, tracking the rally in international bullion prices. While gold ETFs rose about 2.3-2.4 percent, silver ETFs outperformed with gains of as much as 2.6 percent.

The rally came after weaker-than-expected US labour market data fuelled expectations that the Federal Reserve could adopt a less aggressive interest rate stance. Spot gold rose 1 percent to $4,165.29 an ounce after touching its highest level since June 23 earlier in the session, while US gold futures for August delivery gained 1.3 percent to $4,178.50. Gold was on track for its first weekly gain in five weeks, rising about 1.8 percent for the week.

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Silver outperformed gold, with spot prices climbing 2.1 percent to $62.28 an ounce. Platinum gained 2.4 percent and palladium rose 0.9 percent, with all three metals trading near their highest levels in more than a week and set to post weekly gains.

Higher gold prices are generally viewed as positive for gold financiers such as Muthoot Finance and Manappuram Finance, as the value of gold pledged as collateral increases. Stronger bullion prices can also support demand for gold-backed loans, particularly when borrowers seek to monetise the higher value of their jewellery.

Hindustan Zinc, one of the world's largest integrated producers of zinc, lead and silver, also benefited from the sharp rise in silver prices. The company is India's largest primary silver producer, making its shares sensitive to movements in the precious metal.

In the domestic physical market, gold demand eased after a modest improvement earlier in the week as prices rebounded from a three-month low. Gold prices in India rose to as much as Rs 148,046 per 10 grams after touching Rs 140,450 earlier this week. Prices had declined about 8.4 percent in June, their first monthly fall since March, before staging this week's recovery.

The broader market remained positive. At 3:10 pm IST, the Sensex was up 290 points, or 0.37 percent, at 77,792.12, while the Nifty gained 103.60 points, or 0.43 percent, to 24,279.30. Market breadth remained favourable, with 2,055 shares advancing against 1,811 declines, while India VIX fell nearly 4 percent, indicating easing volatility expectations.

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