On October 30, December gold futures on the MCX fell 0.57% to Rs 1,41,790, while silver futures dropped 1.96% to Rs 1,85,735. Sugandha Sachdeva said, "the correction reflects mounting pressure on precious metals." Persistent inflation and strong US economic growth have reduced the appeal of these assets for many investors.
On October 30, December gold futures on the Multi Commodity Exchange (MCX) were trading at Rs 1,41,790 per 10 grams, down 0.57%. Silver futures declined 1.96% to Rs 1,85,735 per kg. In international markets, December gold futures fell 0.76% to $4,000 per ounce, while silver dropped 2.13% to $51 per ounce.
Why Are Gold And Silver Prices Falling?
According to Sugandha Sachdeva, Founder of SS WealthStreet, the correction reflects mounting pressure on precious metals as persistent inflation concerns and expectations of tighter monetary policy weigh on investor sentiment.
The US Federal Reserve has kept interest rates unchanged but maintained a cautious stance on inflation, keeping the possibility of another rate hike in December alive. Adding to concerns, US PCE inflation rose to 3.6% in September from 3.4% in the previous month. Core PCE inflation also increased to 3.1% from 3%.
Meanwhile, the US economy remained resilient, with third-quarter GDP growth coming in at 3.4%, above market expectations of 3.2%. Strong economic growth alongside persistent inflation has strengthened expectations that interest rates could remain higher for longer, reducing the appeal of non-yielding assets such as gold and silver.
US-Iran Tensions And Crude Oil Add To Pressure
Geopolitical tensions involving the US and Iran have added another layer of uncertainty. Elevated crude oil prices have fuelled concerns about energy-driven inflation, potentially complicating the Federal Reserve's policy outlook. While geopolitical uncertainty generally supports gold's safe-haven appeal, the resulting rise in oil prices and inflation expectations is currently overshadowing that support.
Gold And Silver Price Outlook: Key Levels To Watch
From a technical perspective, Sachdeva believes the near-term outlook for both precious metals remains under pressure. International gold has immediate support in the 3,950-3,970 zone, while $4,000 remains a crucial level to reclaim. A sustained break below the support zone could trigger further selling. For international silver, $48 is the next major support, while $53 is likely to act as immediate resistance.
In the domestic market, MCX gold has immediate support at Rs 1,41,500, followed by Rs 1,40,000 and Rs 1,37,000. On the upside, Rs 1,45,000 remains a significant resistance level. MCX silver has support at Rs 1,80,000, followed by Rs 1,73,000, while Rs 1,97,000 is a crucial resistance.
What Should Investors Watch Next?
Going ahead, crude oil prices, US inflation data, Federal Reserve signals and developments in the Gulf region will remain key triggers for precious metals. Any easing in geopolitical tensions and a meaningful correction in crude oil prices could reduce inflationary pressures and create room for a recovery in gold and silver.
Note: The support and resistance levels are analyst estimates and are not guaranteed price targets.