In the early trading session on Tuesday, gold and silver prices exhibited strength, with gold futures on the Multi Commodity Exchange increasing by 0.10% to Rs 1,30,091 per 10 grams, while silver futures advanced by 0.53% to Rs 1,82,699 per kilogram. The rebound follows a day in which both precious metals concluded in negative territory, influenced by profit-taking and macroeconomic indicators. Gold and silver prices ended lower on Monday, experiencing declines in both domestic and international markets, influenced by profit-taking and broader macroeconomic indicators. On the Multi Commodity Exchange, gold February futures settled at Rs 1,29,662 per 10 grams, reflecting a decrease of 0.38%, while silver March futures concluded at Rs 1,81,742 per kilogram, marking a decline of 0.91%.
The downturn in precious metals precedes the monetary policy meetings of the U.S. Federal Reserve, prompting market participants to adopt a cautious stance. A rebound in U.S. 10-year bond yields exerted pressure on sentiment. Furthermore, investor attention continues to center on the U.S. Producer Price Index data for October and November, which is now set to be released in January. “The uncertainty surrounding inflation figures is heightening speculation that the U.S. Fed may adopt a hawkish stance during its policy review,” stated Manoj Kumar Jain.
Jain, however, observed favorable indicators as well — including the People’s Bank of China accumulating gold for a 13th consecutive month and persistent physical delivery shortages in silver, which could bolster prices. He suggests that gold and silver could maintain support levels at $3,960 and $54.40 per troy ounce, respectively, in the global market. “However, continued gold buying by China for the 13th straight month and tightness in physical silver supply may offer downside support,” stated Rahul Kalantri.
The U.S. Dollar Index maintained its strength, positioned around 99.05, reflecting a decline of 0.07 points or 0.07%, which contributes to the downward pressure on metal prices. In the coming week, Jain anticipates that gold and silver will experience significant volatility, influenced by variations in the dollar index, shifts in global financial markets, and updates regarding the U.S. Federal Reserve’s policy decisions.