Gold, silver prices plunge 2% today: Here we decode why
What's the story
Gold and silver prices witnessed a sharp decline of up to 2% in the domestic futures market today. The fall is mainly due to fading hopes of a US Federal Reserve rate cut in December and easing concerns over US tariffs. Today, MCX Gold December futures were trading at ₹1,21,521 per 10g after falling 1.14%. Meanwhile, MCX Silver December contracts were down by a whopping 1.75%, trading at ₹1,52,600 per kg.
Global trend
International gold prices decline for 4th consecutive session
International gold prices have also witnessed a decline for the fourth consecutive session today. The fall comes amid a rise in the dollar and weakening prospects of a rate cut next month. The dollar index rose to 99.59, which has negatively impacted gold's demand as it is denominated in US dollar. A stronger greenback makes the yellow metal costlier in other currencies, affecting its demand.
Market influence
US government shutdown's impact on gold and silver prices
The recent end of a 43-day-long US government shutdown has added to the uncertainty about the world's largest economy. The shutdown delayed key macro data releases, but with it now over, all eyes are on important US data releases this week. These include Thursday's September non-farm payrolls report, which will likely shape the expectations about the monetary policy path of the US Federal Reserve.
Policy signals
Fed Vice Chair's comments impact prices
Fed Vice Chair Philip Jefferson's recent comments about proceeding slowly with further rate cuts have dented expectations for a decrease next month. "With no major positive fundamental triggers in recent days, bulls remain hesitant—especially with both metals still trading at historically high levels," said Rahul Kalantri, VP of commodities at Mehta Equities.
Market anticipation
Traders await US economic data, support levels
Traders are now waiting for a fresh round of US economic data. A stronger dollar index and slightly higher 10-year treasury yields have added pressure to precious metals. Kalantri has set support levels for gold at $4,000 and $3,965, while resistance is at $4,075 and $4,110. For silver, support is at $49.70 and $49.45 while resistance is at $50.75 and $51.10 respectively.