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Gold prices witnessed a sharp correction on Wednesday, December 31, as traders booked profits after a strong rally. Precious metals came under pressure on the Multi-Commodity Exchange (MCX), with silver seeing particularly steep losses due to its extended run-up.
On MCX, gold February futures declined nearly 1% to trade around Rs. 1,35,600 per 10 grams in early deals, while MCX silver March futures fell 4.3% to Rs. 2,40,400 per kg.
The price of 22K gold went down slightly by Rs. 32, so the price of ten grams of the yellow metal is at Rs. 1,24,550.
24K gold was sold in Mumbai and Kolkata for Rs. 1,35,880 per ten grams, while in Chennai it was priced at Rs. 1,36,910. The price in Delhi was Rs. 1,36,030 for the same quantity of 24K gold.
Mumbai and Kolkata had the same price for ten grams of 22K gold, which was Rs. 1,24,550, while the price was Rs. 1,25,500 in Chennai and Rs. 1,24,700 in Hyderabad.
In Delhi price for ten grams of 22K gold was Rs. 1,24,700.
The correction comes after an exceptional year for precious metals. Domestic spot gold prices have surged over 75% so far this year, while silver has outperformed significantly, delivering gains close to 170%.
Amid the high prices, traders decided to take profits, resulting in a steep correction, especially in silver.
The overall fundamentals remain favourable for gold despite the fall. The major factors contributing to the price hike are expected interest rate cuts by the US Federal Reserve, continued monetary authority buying, political instability, and large investments in gold-backed exchange-traded funds (ETFs).
Furthermore, the silver market has been boosted not only by safe-haven demand but also by the growing industrial use and the supply limitations.
In international markets, US gold futures slipped over 1% to around $4,345 per troy ounce, tracking a firmer US dollar.
The decline occurred after the Fed’s December meeting minutes were released, which revealed that the policymakers had different views on when and how much to cut rates in the future.
The next Federal Open Market Committee meeting is scheduled for January 27-28. Although the markets expect rate cuts to take place in 2026, some analysts think that the authorities will continue with the no-change policy in the short run.
Also Read: Why Bitcoin is a Better Alternative to Gold: 4 Key Reasons
On MCX, gold is expected to find support near Rs. 1,35,200-Rs. 1,34,000, while resistance is seen around Rs. 1,37,700-Rs. 1,39,200.
Silver support is placed near Rs. 2,40,000-Rs. 2,28,000, with resistance around Rs. 2,62,000-Rs. 2,75,000.
