Following a streak of three consecutive sessions at fresh all-time highs, the prices of gold December futures on the MCX experienced a decline on Friday, opening lower by Rs 722 or 0.61% at Rs 1,16,866 per 10 grams. Meanwhile, silver December futures contracts on MCX opened at Rs 1,42,500/kg, reflecting a notable decline of Rs 2,220 or 1.5%. In the international market, gold prices remained stable on Friday, poised for a seventh consecutive weekly increase, supported by anticipations of additional U.S. interest rate reductions this year and concerns regarding the ramifications of a potential U.S. government shutdown.
Spot gold remained relatively stable at $3,851.99 per ounce, as of 0247, following its peak of $3,896.49 reached on Thursday. Bullion has experienced an increase of 2.4% thus far this week. The U.S. government shutdown entered its second day on Thursday, raising concerns about potential delays in the release of critical economic data, notably the highly anticipated non-farm payrolls report scheduled for Friday. Recent U.S. economic data have heightened expectations for additional rate cuts this year, with traders anticipating a nearly guaranteed 25 basis-point reduction this month. In the preceding trading session, gold and silver concluded positively in the domestic market, while exhibiting a weaker performance in the international markets. The December futures contract for gold concluded at Rs 1,17,588 per 10 grams, reflecting an increase of 0.28%. Meanwhile, the December futures contract for silver settled at Rs 1,44,720 per kilogram, marking a rise of 1.81%.
Gold and silver exhibit significant price volatility in global markets, with profit-taking occurring from record-high levels in anticipation of the U.S. non-farm employment data. Gold and silver prices experienced a significant decline in response to the downturn in crude oil prices. “Expectations of an increase of U.S. non-farm employment by 30,000 to 52,000 are triggering profit taking in gold and silver prices,” stated Manoj Kumar Jain. Jain indicated that the primary long-term fundamentals of gold and silver remain unchanged, with both precious metals maintaining their critical support levels. A buy-on-dips strategy may still be effective from a long-term viewpoint.
The depreciation of the rupee is contributing to elevated prices in domestic markets. Today, the US Dollar Index was hovering near the 97.89 mark, gaining 0.04%. “We expect gold and silver prices to remain volatile in today’s session amid fluctuations in the dollar index, instability in the global financial markets, and in anticipation of the U.S. non-farm employment data. Gold is anticipated to trade within the range of $3,820-3,920 per troy ounce, while silver is projected to trade between $45.50-47.40 per troy ounce in today’s session,” he added.