Gold prices witnessed a steep sell-off on Friday, January 30, as profit booking at elevated levels coincided with a stronger US dollar, triggering a sharp correction across domestic and global bullion markets.
On MCX, gold February futures dropped nearly 6% to Rs. 1,59,250 per 10 grams in early trade. Silver March futures mirrored the decline, plunging close to 6% to around Rs. 3,75,900 per kg, reflecting broad-based selling pressure across precious metals.
The price of 24K gold declined by Rs. 823 in early trade on Friday, with ten grams of the precious metal trading at Rs. 1,70,620.
The price of 22K gold also decreased by Rs. 755 with ten grams of the yellow metal selling at Rs. 1,56,400.
The price of ten grams of 24K gold stood at Rs. 1,70,620 in Mumbai and Kolkata and Rs. 1,76,730 in Chennai.
In Delhi, the price of ten grams of 24K gold stood at Rs. 1,70,770.
The sharp fall in gold prices was largely driven by a rebound in the US dollar index, which rose nearly 0.5% after political developments in the US reduced near-term uncertainty.
The dollar gained value while gold demand declined, supported by the last-minute agreement to avoid the partial government shutdown and the US Federal Reserve's decision to keep interest rates unchanged.
Gold becomes expensive for investors who hold different currencies as the dollar becomes strong, leading to decreased demand and subsequent selling.
Despite Friday’s correction, gold remains one of the strongest-performing asset classes this year.
Prices have surged over 24% so far in January, marking the metal’s sixth consecutive month of gains and its largest monthly rise since January 1980.
Silver has outperformed, gaining around 62% this month, placing it on track for its best-ever monthly performance.
Also Read: Tom Lee Sees Bitcoin and Ether Catch Up After Gold Rally Cools: Is Ethereum On the Run?
For MCX gold, key support levels are seen around Rs. 1,65,500 and Rs. 1,61,100, while resistance is placed near Rs. 1,74,400 and Rs. 1,80,000. Silver support lies near Rs. 3,88,000 and Rs. 3,74,000, with resistance around Rs. 4,10,000-Rs. 4,22,000.
Internationally, gold has support at $5,255 and $5,175, while resistance is at $5,440 and $5,540. Silver has support at $109.10 and $104.75, while resistance is at $115.15 and $117.80.