On Monday, gold prices commenced the trading session with a modest decline, as February futures were quoted at Rs 1,30,401 per 10 grams, reflecting a decrease of Rs 61 or 0.05% on the Multi Commodity Exchange. The price action indicates a prudent sentiment among traders in anticipation of the upcoming monetary policy meeting of the U.S. Federal Reserve this week. In early trading, silver futures experienced downward pressure, with the March contract declining by Rs 1,704, representing a decrease of 0.93%, and currently priced at Rs 1,81,704 per kilogram.
This can be ascribed to varying dollar index levels; however, fundamental factors like physical delivery shortages and the weakness of the rupee persist in offering support. On Friday, gold and silver concluded on a positive note in the domestic market while exhibiting a mixed performance in the international markets. The February futures contract for gold concluded at Rs 1,30,462 per 10 grams, reflecting an increase of 0.30%. Meanwhile, the March futures contract for silver settled at Rs 1,83,408 per kilogram, marking a rise of 2.96%.
Gold and silver are exhibiting significant price volatility in anticipation of the FOMC monetary policy meetings. The recent U.S. economic data presented a mixed picture, with the dollar index declining to a one-month low, while the strong likelihood of Federal Reserve rate cuts provided support for prices. Today, the US Dollar Index was hovering near the 98.89 mark, falling 0.10 or 0.10%.
Shortages in physical delivery and increases in base metals have propelled silver prices to an unprecedented peak. The depreciation of the rupee has bolstered metal prices within the domestic markets. “However, gold prices slipped from their high amid a rebound in U.S. bond yields and a drop in U.S. unemployment claims.” According to Manoj Kumar Jain, gold and silver may maintain their crucial support levels of $3,960 per troy ounce and $54.40 per troy ounce, respectively, in the international markets. Jain noted that he anticipates fluctuations in gold and silver prices this week, influenced by the instability of the dollar index, the turbulence in global financial markets, and the upcoming Federal Reserve monetary policy meetings.