Why Have Gold and Silver Prices Dropped on MCX?
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Synopsis
In today’s financial landscape, gold and silver prices have retreated due to profit booking amid a stronger US dollar. With the Reserve Bank of India's policy decisions looming, market sentiment remains cautious. Stay tuned for further updates on the precious metals market.
Key Takeaways
- Gold prices fell to Rs 1,30,288 per 10 grams.
- Silver prices decreased to Rs 1,82,200 per kilogram.
- Weak demand in the spot market is pressuring prices.
- Experts predict a potential rally if resistance levels are breached.
- Market is awaiting decisions from the RBI and the US Federal Reserve.
Mumbai, Dec 4 (NationPress) Gold and silver prices saw a decline during the morning session on Thursday, as investors opted to take profits following a strengthening of the US dollar against other major currencies.
Weak demand in the spot market further contributed to the downward pressure on these precious metals.
On the Multi Commodity Exchange (MCX), gold futures for February dropped by 0.13 percent, settling at Rs 1,30,288 per 10 grams.
According to experts, “MCX Gold has continued its upward trajectory, reaching a new high around Rs 1,31,400, and is nearing its all-time resistance point at Rs 1,32,294, which is a significant breakout barrier.”
They further noted, “A definitive close above Rs 1,32,300 could propel prices towards Rs 1,34,400–Rs 1,35,500.”
Meanwhile, March silver futures were down 0.08 percent, trading at Rs 1,82,200 per kilogram.
MCX Silver remains notably bullish, bolstered by global silver strength and a weak rupee.
Analysts stated, “A sustained breakout above Rs 1,84,000 could drive the rally towards Rs 1,86,000–Rs 1,88,000.”
They also highlighted that immediate support is positioned near Rs 1,81,700–Rs 1,80,300, while the previous high of Rs 1,71,750 now serves as a robust long-term support level.
The dollar index regained the 99 mark after dipping to 98.85 in the last session.
However, its rise is expected to be limited as traders anticipate a potential interest rate cut by the US Federal Reserve soon.
In India, all eyes are on the upcoming meeting of the Reserve Bank of India’s Monetary Policy Committee set for December 5.
Experts are split on the RBI's next move; some analysts suggest a 25-basis-point rate cut, while others predict that rates will remain unchanged for the third consecutive review.
Globally, gold traders are awaiting significant cues from the US Federal Reserve, with the Federal Open Market Committee scheduled to convene on December 9 and 10 to deliberate on benchmark interest rates. A rate reduction could lead to an uptick in gold prices.
Point of View
It's crucial to remain objective and informative. The recent fluctuations in gold and silver prices reflect broader economic trends influenced by currency strength and market sentiment. Our commitment is to keep our readers informed about these financial developments, enabling them to make educated decisions.
NationPress
04/12/2025
Frequently Asked Questions
What caused the recent drop in gold and silver prices?
The decline in gold and silver prices is attributed to profit booking by investors following a stronger US dollar.
What is the significance of the upcoming RBI meeting?
The Reserve Bank of India's upcoming meeting is crucial as it may result in changes to interest rates, impacting market dynamics.
How do currency fluctuations affect gold prices?
Gold prices are inversely correlated with the strength of the US dollar; a stronger dollar typically leads to lower gold prices.
What support levels should investors watch?
Investors should monitor immediate support levels around Rs 1,81,700–Rs 1,80,300 and the previous high of Rs 1,71,750.
What should traders expect from the upcoming Federal Open Market Committee meeting?
Traders are anticipating potential interest rate cuts, which could influence gold prices positively.
