On MCX, gold futures for December delivery were trading Rs 487, or 0.33 per cent, lower at Rs 1,48,410 per 10 grams. During trade, gold fell by Rs 747 or 0.50 per cent to an intraday low of Rs 1,48,150. Its highest level of the day was Rs 1,49,034.
On the other hand, more pressure was seen in silver futures for December delivery. Silver fell by Rs 2,942, or 1.29 per cent, to intraday low of Rs 2,24,500 per kg in trade. Later it was seen trading at Rs 2,25,338 per kg, down Rs 2,104 or 0.93 per cent.
According to market experts, this fall in precious metals was mainly due to the increasing tension between the US and Iran over the Strait of Hormuz. The tensions have kept global energy prices high, while a rise in US bond yields has made non-interest-bearing investment options like gold and silver less attractive.
Spot gold remained under pressure in the international market also. It had fallen nearly 4 percent in the previous trading session, hitting a seven-week low.
According to reports, Iranian officials have expressed pessimism over the prospects of any deal with Washington before the US midterm elections in November.
The situation became more complicated when US President Donald Trump rejected Iran's latest proposal to reopen the Strait of Hormuz within seven days. This has created uncertainty in the energy market and investors have moved towards yield-based investments rather than safe assets.
According to commodity experts, the level of Rs 1,50,000 to Rs 1,50,700 is the first resistance zone for gold in the near term. Above this, the level of Rs 1,52,000 to Rs 1,52,600 is considered important. On the downside, the range of Rs 1,48,000 to Rs 1,47,300 is the major support zone. If gold slips strongly below Rs 1,48,000, it may see further decline.
At the same time, for silver, the level of Rs 2,27,000 to Rs 2,28,000 per kg is being considered as the nearest resistance. Above this, the next resistance lies in the zone of Rs 2,32,000 to Rs 2,33,000. On the downside, the level of Rs 2,24,000 to Rs 2,23,000 and then Rs 2,20,000 to Rs 2,19,000 is being considered as important support.
Experts say that at present the trend in both gold and silver remains cautious to negative. To give a signal of strength, gold will have to remain above Rs 1.50 lakh, while for silver it will have to cross the level of Rs 2.28 lakh. On the other hand, there will be a possibility of further decline in both the metals if the support levels are broken.