Gold and silver prices experienced a decline on the Multi Commodity Exchange (MCX) on Thursday morning, attributed to profit booking ahead of the release of important US Consumer Price Index (CPI) inflation data, weaker spot demand, and a stronger dollar against other currencies.
As of around 9:05 AM, MCX Gold for October futures was down by 0.28 percent, priced at ₹1,08,681 per 10 grams. Similarly, MCX Silver for December futures decreased by 0.14 percent to ₹1,25,000 per kg.
Despite the anticipation of a possible rate cut by the US Federal Reserve next week, which typically supports gold prices, the ongoing Bull Run of gold and prices hovering near record highs seem to have led to demand fatigue in the spot market. Gold achieved a record high of ₹1,09,840 per 10 grams on September 9, but due to weak demand and a lack of fresh market triggers, it has fallen by over ₹1,000, or 1 percent, in just two days.
Market participants are keenly awaiting a 25 basis points rate cut from the US Federal Reserve, scheduled for September 17, especially as recent macroeconomic data indicates increasing stress in the US jobs market. A Reuters report highlighted that the economy created approximately 911,000 fewer jobs over the past year than previously estimated.
Attention is also directed towards the US CPI inflation data set to be released later today, which is expected to shape market expectations regarding the Fed’s monetary policy. A Reuters poll suggests that CPI may have risen by 0.3 percent month-on-month in August, following a 0.2 percent growth in July, with a projected year-on-year increase of 2.9 percent compared to 2.7 percent in the previous month.
Given the current market conditions, experts predict that gold and silver prices will remain volatile in the short term. Manoj Kumar Jain from Prithvifinmart Commodity Research advises investors to consider booking profits ahead of the US inflation data. He suggests that gold might trade within the range of $3,510 to $3,770 per troy ounce, while silver is expected to fall between $39.10 and $44.00 per troy ounce this week.
To navigate the current market, Jain recommends booking profits on long positions in gold and suggests buying silver at around ₹1,24,600, with a stop loss placed below ₹1,23,500 and a target of ₹1,25,700 to ₹1,26,600. He highlights that gold has support at $3,655 to $3,634, with resistance at $3,700 to $3,714 per troy ounce. For silver, support stands at $41.30 to $40.94, while resistance lies at $42.00 to $42.45 during today’s trading session.
Further insights offered by Rahul Kalantri, VP of commodities at Mehta Equities, indicate that in INR, gold has support at ₹1,08,340 to ₹1,07,740 and resistance at ₹1,09,450 to ₹1,09,950. For silver, the support levels are at ₹1,23,550 to ₹1,22,750, with resistance between ₹1,25,950 and ₹1,26,740.
As market dynamics continue to fluctuate, experts urge investors to consult certified professionals before making any investment decisions, as conditions are subject to rapid changes.
