Gold and silver prices saw a decline on Wednesday as investors opted to take profits, despite a weaker US dollar and ongoing geopolitical uncertainties. MCX gold April futures dropped by 0.52% to Rs 1,62,452 per 10 grams by 11.15 am intraday. Similarly, MCX silver May futures fell by 1.69% to Rs 2,73,150 per kg.
The profit-taking came after a significant increase in MCX gold April futures by nearly 2% and a surge of 4% in silver May futures in the previous session. The US dollar also weakened by 0.07% intraday to 98.75 cents, making dollar-denominated bullion more affordable for holders of other currencies.
Moreover, the price of crude oil slipped below $90 a barrel, alleviating inflation concerns among traders that had previously boosted demand for gold as an inflation hedge. Brent crude oil prices decreased by 0.99% to $86.93 a barrel, while US West Texas Intermediate (WTI) futures saw a 0.75% drop to $82.82.
Following a more than 11% decline in both futures overnight, the steepest single-day drop in four years occurred after the International Energy Agency proposed the largest emergency reserves release in its history. Investors reacted by taking profits amidst uncertainty surrounding the war’s trajectory, fueled by conflicting signals from US President Donald Trump and intense US and Israel airstrikes on Iran.
Investors are closely monitoring cues from the Personal Consumption Expenditures index, scheduled for Friday, to assess US inflation trends and the likelihood of Fed rate adjustments. Despite short-term fluctuations, the medium to long-term outlook for COMEX Silver remains positive, according to a market participant.
An analyst noted that “MCX Gold has support at Rs 1,61,800 to Rs 1,60,350 zone with resistance at Rs 1,64,400 and Rs 1,66,600 levels. MCX silver has support at Rs 2,744,000 and Rs 2,68,000, with resistance at Rs 2,81,000 and Rs 2,85,500.”
