Gold and silver prices saw a significant decline on Wednesday due to worries about a potential rate hike by the US Federal Reserve. Gold futures on the Multi Commodity Exchange (MCX) for August fell by 1.51% to Rs 1,50,140 per 10 grams, while silver futures for July dropped nearly 1% to Rs 2,36,239 per kg.
The price of 24-carat gold per 10 grams stood at Rs 1,48,429 on Wednesday, down from Rs 1,52,519 at the previous day’s market opening, as reported by the India Bullion and Jewellers Association (IBJA). Internationally, spot gold prices decreased by 1.8% to $4,187.59 per ounce, hitting an 11-week low, with US gold futures for August delivery also declining to $4,213.40.
Analysts attributed these price movements to a stronger dollar and increasing crude oil prices due to tensions in the Middle East, leading to concerns about inflation and expectations of prolonged higher rates by the Federal Reserve. The CME FedWatch tool indicated that traders were estimating a more than 70% chance of a US Fed rate hike by December.
Market experts noted that for MCX gold, there is immediate resistance at Rs 1,52,000, with a need for a sustained move above this level to strengthen momentum towards Rs 1,54,000-Rs 1,55,000. They also highlighted the cautious to negative bias in the near term, influenced by geopolitical uncertainties and market volatility.
MCX silver, on the other hand, is currently holding above the crucial support zone of Rs 2,34,000 to Rs 2,32,000, indicating cautious price behavior amidst ongoing volatility. Analysts pointed out that immediate resistance for silver is at Rs 2,38,000 to Rs 2,40,000, while a significant drop below the Rs 2,32,000 support level could escalate selling pressure.
