On Monday, gold prices began the day in the red, pressured by a stronger-than-expected US dollar and a decrease in expectations over a US Federal Reserve rate cut in December. Gold futures on the Multi-Commodity Exchange (MCX) for December delivery fell 1.04% to Rs. 1,22,900 per 10 grams, while Silver futures fell 0.61% to Rs. 1,53,209 per kg.
After the US job market data came out stronger than expected, expectations of a December Fed rate cut were revised to be less likely, altering market risk appetites.
The US Labor Department stated that 119,000 nonfarm payrolls were added in September, more than double the projected figure of 50,000. The dollar index climbed above the 100 level for the first time in six months.
Geopolitical risk premiums also eased after optimistic comments indicated progress on a possible peace framework related to Russia and Ukraine.
In Mumbai, gold prices edged lower. The price of 24-carat gold fell to Rs. 12,513 per gram from Rs. 12,584 a day earlier, while 10 grams traded at Rs. 1,25,130 compared to yesterday’s Rs. 1,25,840.
Likewise, 22-carat gold declined to Rs. 11,470 per gram from Rs. 11,535, with the 10-gram value decreasing to Rs. 1,14,700 from Rs. 1,15,350.
In Chennai, gold prices also fell. The price of 24-carat gold fell to Rs. 12,567 per gram compared to Rs. 12,688 a day earlier, while 10 grams traded at Rs. 1,25,670 compared to Rs. 1,26,880 yesterday.
Similarly, 22-carat gold slipped to Rs. 11,520 per gram from Rs. 11,630, with the 10-gram price easing to Rs. 1,15,200 from Rs. 1,16,300.
Manoj Kumar Jain of Prithvifinmart Commodity Research indicated that international gold has support at 4034 and 4000 dollars, and resistance at 4110 and 4140 dollars, per troy ounce. Silver has support at 49.40 and 48.80 dollars, and resistance at 50.50 and 51.10 dollars.
On the MCX, gold has support zones at Rs. 1,23,300 and Rs. 1,22,500, whereas resistance levels lie at Rs. 1,24,750 and Rs. 1,25,500. Silver finds support near Rs. 1,53,000 and Rs. 1,51,500 and resistance at Rs. 1,55,500 and Rs. 1,57,000.
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Analysts continue to approach purchasing gold with caution. With a strong dollar index, uncertainty around US tariffs and geopolitical developments, gold prices are still likely to remain volatile; some analysts are looking for further price declines.
Anuj Gupta, a SEBI-registered analyst, is of the opinion that international gold can decline to the $3,900 range, while MCX gold may return to the Rs. 1,18,000 range.