On Friday, October 10, gold edged lower as investors booked profits after a significant increase in price in the last few weeks. The market witnessed a short-term correction due to declining geopolitical tensions, like the ceasefire agreement between Israel and Hamas.
However, analysts believe gold's long-term view is still positive due to the global economy's uncertainty and the anticipated cuts in interest rates by the US Federal Reserve.
On the Multi-Commodity Exchange (MCX), December Gold futures were down 0.08%, trading at Rs. 1,20,401 per 10 grams. The dollar index declined by over 0.20%, limiting losses for bullion as a weaker US dollar makes gold cheaper.
Gold prices in Mumbai experienced a drop. The 24-carat gold per gram value decreased by Rs. 186, and was trading at Rs. 12,229 compared to Rs. 12,415 the day before. The rate for 10 grams stood at Rs. 1,22,290, marking a drop of Rs. 1,860 from the previous session.
22-carat gold prices declined as well. The price per gram slipped by Rs. 170 to Rs. 11,210, while 10 grams traded at Rs. 1,12,100, down by Rs. 1,700 from Thursday’s level.
The correction comes after multiple sessions of upward movement, as traders locked in gains amid softer global cues.
A similar downward trend was observed in Chennai. The price of 24-carat gold per gram dropped by Rs. 180 to Rs. 12,284, while the 10-gram rate declined by Rs. 1,800 to settle at Rs. 1,22,840.
22-carat gold price per gram decreased by Rs. 165 to Rs. 11,260, and the 10-gram rate fell by Rs. 1,650, now trading at Rs. 1,12,600.
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Globally, spot gold was seen near $3,977.87 per ounce, slightly higher but still below the recent high of $4,059.05.
According to Manoj Kumar Jain of Prithvifinmart Commodity Research, MCX gold has strong support at Rs. 1,19,100 to Rs. 1,17,700 and resistance near Rs. 1,21,650 to Rs. 1,23,100. Silver has support at Rs. 1,44,400 and resistance around Rs. 1,48,800.
The analysts are recommending traders not to open new positions during the high volatility trading, while the long-term investors can think of starting to buy gradually with the price drop as an opportunity.
The general trend for gold is still bullish since the market is anticipating the US Federal Reserve to cut rates and continued global economic uncertainty.