Gold Falls Below Rs 1.34 Lakh, Silver Slides Over 1% on MCX
Gold and silver prices traded lower on MCX due to profit booking and muted demand. Experts flag key support and resistance levels.
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On December 16th, Tuesday, the prices of gold and silver fell down in the early trading session on the Multi Commodity Exchange (MCX), as the traders secured their profits, considering the dull demand in the country and the lack of new market signals.
At 9:10 AM, gold futures for February delivery on the MCX were nearly half a percent lower, trading at around Rs 1,33,492 per 10 grams. Silver futures for March delivery, on the other hand, experienced a bigger decrease, dipping by more than 1.6% and coming down to Rs 1,94,657 per kg.
The drop in domestic futures occurred even while global gold prices were very close to their historical highs. In the international market, gold was priced $4,300 per troy ounce, due to the weaker US dollar, which fell to its lowest point in nearly two months.
The U.S. nonfarm payrolls data, due later in the day, is being watched closely by the market participants. The report is likely to give new signals on the future US monetary policy direction. Currently, according to the CME FedWatch Tool, traders are pricing in a 76% chance of a 25-basis-point rate cut by the U.S. Federal Reserve in January.
Analysts predict that the price of bullion will face changes throughout the week. They will be reacting to the global factors that trigger changes. The key U.S. macroeconomic indicators, the policy meetings of the Bank of England and the Bank of Japan, as well as the developments regarding the Russia-Ukraine war are all expected to contribute to the market's mood.
In the last session, gold and silver were up significantly. MCX gold February contracts already reached a record high of Rs 1,35,496 per 10 grams on Monday before being slightly modified to Rs 1,34,061. March futures for silver finished the session with a significant increase of 2.7% at a closing of Rs 1,98,049 per kg.
Market experts, despite short-term ups and downs, still see gold as a positive medium-term investment due to the anticipated rate cuts and global uncertainties which are likely to continue. Some analysts encourage investors to accumulate gold only at lower prices, rather than chasing after it when the price goes up.
According to Manoj Kumar Jain of Prithvifinmart Commodity Research, buying interest can near lower levels. He recommended buying gold at Rs 1,33,600 with a stop loss at Rs 1,32,800 and a target of Rs 1,35,000. For silver, he said it was best to wait for the price to fall before starting any new long positions.
Technical specialists have also pointed out important levels to keep an eye on. Jain commented that gold's first line of defense is at Rs 1,33,500 and Rs 1,32,800, while the upside barrier is at Rs 1,34,850 and Rs 1,35,500. In the case of silver, the levels of support are lined up at Rs 1,96,200 and Rs 1,94,400, whereas resistance is located close to Rs 2,00,000 and Rs 2,01,400.
According to Jigar Trivedi, Senior Research Analyst at Reliance Securities, gold February futures could show weakness during the day, and might dip as low as Rs 1,33,000.
Rahul Kalantri, the Vice President of Commodities at Mehta Equities, indicated support for gold at Rs 1,33,250 and Rs 1,32,450, while resistance is located at Rs 1,34,950 and Rs 1,35,670. Speaking of silver, he pointed out support at Rs 1,96,450 and Rs 1,95,280 and resistance at Rs 1,99,810 and Rs 2,01,270.
The traders and investors are likely to be very careful and waiting for the market to give some signs before they can do anything, especially since there are many global events coming up.
