Gold and silver prices declined on the Multi Commodity Exchange (MCX) on Wednesday, October 21, amid rising crude oil prices, inflation concerns and expectations that the US Federal Reserve could maintain a tighter monetary policy for longer.
MCX December gold futures were trading at around ₹1.46 lakh per 10 grams, down 0.35%, while December silver futures fell 1.20% to approximately ₹2.08 lakh per kg. The decline comes amid uncertainty over global energy supplies, geopolitical developments and the outlook for US interest rates.
Why are gold and silver prices falling?
Rising crude oil prices have fuelled concerns that inflation could remain elevated, potentially prompting central banks to keep interest rates higher for longer. Higher interest rates tend to reduce the appeal of gold, which does not generate interest income, while a stronger US dollar can make precious metals more expensive for buyers using other currencies.
Investors are also tracking the Federal Reserve’s upcoming policy decisions and economic data for clues about the direction of interest rates. These factors have added pressure to precious metals in recent trading sessions.
Gold and silver: Key levels to watch
According to market analysts, the following technical levels could guide trading in the near term:
- Gold: International prices have support around $4,080–$4,200 per ounce. A sustained move above $4,200 could open the way towards $4,400, while a break below support could expose prices to a decline towards $3,950.
- Silver: International silver has support near $57 per ounce. A sustained move above $59 could pave the way towards $62, while a decline could take prices towards $54–$55.50.
- MCX gold: ₹1.45 lakh per 10 grams is an important support level, while a recovery above ₹1.47 lakh could indicate near-term stabilisation.
- MCX silver: Support is seen around ₹2.08 lakh per kg, while a sustained move above ₹2.13 lakh could strengthen recovery prospects.
These levels are technical assessments and are not guaranteed price targets.
Will festive demand support gold prices?
Festive and wedding-season demand in India could provide some support to gold prices despite weakness in international markets. Recent price corrections have encouraged some buyers to enter the market, although elevated prices continue to make consumers cautious about their purchases.
Market participants will closely monitor crude oil prices, movements in the US dollar, Federal Reserve signals and currency fluctuations to assess the next direction for gold and silver. However, domestic demand may not be sufficient to offset sustained weakness in international bullion prices.
What should buyers watch next?
Gold and silver prices are likely to remain sensitive to inflation data, interest-rate expectations and geopolitical developments. Buyers should monitor price movements and local jewellery rates before making purchasing decisions, while traders should remember that technical support and resistance levels can change with market conditions.