New Delhi, October 30 (IANS). The trend of falling prices of gold and silver continues amid the festive season. On Friday, the last trading day of the week, there was pressure on precious metals in both domestic and international markets. Gold and silver on MCX fell by Rs 3,000 due to higher than expected inflation in the US, the possibility of the Federal Reserve increasing interest rates in December and higher bond yields. At present, consumers who are preparing for shopping before Dhanteras and Diwali are getting its benefit.
In the international market Comex, gold was seen trading around 0.28 percent lower at $ 4,020 an ounce, while silver fell 1.20 percent to $ 51.750 an ounce.
According to experts, US core PCE inflation rose 0.3 percent in September, while the annual rate reached 3.1 percent. Along with this, the 3.4 percent growth of the US economy in the third quarter has indicated that the Federal Reserve can keep interest rates high for a long time. The market now considers the probability of a rate hike by the Fed in December to be more than 80 percent, due to which non-interest bearing assets like gold remain under pressure.
At the same time, the effect of global weakness was also visible on the Indian market. In the domestic market, gold fell to Rs 1.42 lakh per 10 grams and silver was seen trading around Rs 1.86 lakh per kg.
On the Multi Commodity Exchange (MCX), gold for December delivery fell to the day's low of Rs 1,41,753 per 10 grams, falling by more than Rs 800 or 0.59 per cent from its previous closing price of Rs 1,42,596. At the same time, a bigger fall was recorded in silver and it fell by Rs 3,730 or 1.96 percent from its previous closing price of Rs 1,89,453 to the day's low of Rs 1,85,723 per kg.
According to technical analysts, gold is currently close to the important support zone of Rs 1.40 lakh to Rs 1.41 lakh. If this level is broken then prices may slip to Rs 1.37 lakh to Rs 1.38 lakh per 10 grams. Whereas for silver, Rs 1.83 lakh to Rs 1.85 lakh per kg is being considered as the next major support.
After a continuous decline, silver has now fallen to less than half its lifetime high level. Let us tell you that in the last week of January this year, silver broke all the records and crossed the historical level of Rs 4 lakh and touched a high level of Rs 4,20,048, but after that it declined continuously, and now silver is available at half the price of its highest level.
This is why market experts believe that the current levels may be attractive for long-term investors and consumers doing festive shopping. However, in the short term, the Federal Reserve policy, dollar index, US bond yields and crude oil prices will decide the direction of the market.
Meanwhile, crude oil prices are also under discussion. There is instability in the oil market due to increasing tension in West Asia, developments related to Iran and fears of supply disruption. Higher oil prices could increase inflation, causing central banks to postpone interest rate cuts. This is the reason why investors remain cautious in gold and silver at present.
According to experts, now all eyes are on the Fed meeting on 8-9 December and the next data related to inflation and employment.
If the upcoming data remains weak and expectations of increasing interest rates are low, then gold and silver may recover. At the same time, if the data comes out strong (inflationary), then the loss may increase further, in which there is a possibility of silver falling faster than gold.
–IANS
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