What Caused Gold and Silver Prices to Decline on MCX Ahead of US Inflation Data?
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Synopsis
In a surprising turn of events, gold and silver prices have dipped in the domestic futures market as investors cash in on recent gains. With crucial US inflation data on the horizon, the market is on high alert. Discover how these factors could shift the landscape for precious metals.
Key Takeaways
- Gold and silver prices have dropped as investors take profits.
- US inflation data release is highly anticipated.
- Current support and resistance levels for gold and silver are defined.
- Job market indicators are influencing expectations for interest rates.
- Global market volatility may arise from central bank decisions.
Mumbai, Dec 18 (NationPress) - On Thursday morning, the prices of gold and silver fell in the domestic futures market as investors took profits following a recent surge to record highs. A modest increase in the US dollar and caution ahead of crucial US inflation data also contributed to the drop in precious metal prices.
During early trading, February contracts for MCX gold were down by 0.20 percent, priced at Rs 1,34,619 per 10 grams.
Experts noted that for gold in INR, support levels are at Rs 1,33,850 to Rs 1,33,110, while resistance levels are at Rs 1,35,350 to Rs 1,35,970. For silver, support is at Rs 2,05,650 to Rs 2,03,280, with resistance at Rs 2,08,810 to Rs 2,10,270.
MCX silver March contracts saw a decline of 0.47 percent, settling at Rs 2,06,451 per kg.
This decline followed a strong performance in the previous session, where both gold and silver closed at elevated levels.
On Wednesday, gold February futures on the MCX rose by 0.36 percent, finishing at Rs 1,34,894 per 10 grams.
Silver prices experienced a significant surge, reaching a record high of Rs 2,07,833 per kg during the session and concluding 4.9 percent higher at Rs 2,07,435 per kg.
Market participants are eagerly anticipating the release of the US Consumer Price Index data for November, scheduled for later on Thursday.
Additionally, investors are awaiting the Personal Consumption Expenditures inflation data set to be released on Friday.
These inflation figures are expected to significantly influence expectations surrounding the future interest rate trajectory of the US Federal Reserve.
Analysts speculate that if the inflation data falls below market anticipations, gold prices may see further increases, as lower inflation could bolster hopes for interest rate cuts.
Recent job market statistics have also contributed to these expectations, as the US unemployment rate climbed to 4.6 percent in November, the highest since September 2021.
This has fueled speculation that the US Fed might implement a 25 basis points rate cut in January.
In addition to US data, investors are monitoring the Bank of Japan’s policy decision due on Friday, where a benchmark interest rate hike to its highest level in nearly three decades is widely anticipated, a move that could create volatility in global financial markets and affect precious metal prices.
Point of View
It is important to note that fluctuations in gold and silver prices reflect broader economic trends influenced by inflation data and market sentiment. Our responsibility lies in providing accurate, timely information to help our readers navigate these changes effectively, always prioritizing their financial interests.
NationPress
19/12/2025
Frequently Asked Questions
Why did gold and silver prices fall?
Gold and silver prices fell due to profit booking by investors and a slight rise in the US dollar, coupled with caution ahead of key US inflation data.
What are the support and resistance levels for gold and silver?
For gold, support is at Rs 1,33,850-1,33,110 and resistance at Rs 1,35,350-1,35,970. For silver, support is at Rs 2,05,650-2,03,280 and resistance at Rs 2,08,810-2,10,270.
What impact does US inflation data have on precious metals?
US inflation data can significantly impact precious metals, as lower inflation may increase demand for gold and silver, leading to price increases.
What is the current trend in the job market?
The US unemployment rate has risen to 4.6 percent, the highest level since September 2021, raising expectations of potential interest rate cuts.
What should investors watch for next?
Investors should monitor upcoming US inflation data and the Bank of Japan's policy decisions, as these could greatly influence market stability and precious metal prices.
