Gold and Silver Futures: A Slight Respite Amidst Volatility
Gold and silver futures opened with a slight uptick on Friday, providing a glimmer of hope following a tumultuous week for these precious metals. On the Multi Commodity Exchange (MCX), gold for February 5th delivery was priced at Rs 1,37,805 per 10 grams, reflecting a modest rise of Rs 63 or 0.05%. Similarly, silver for March 5th delivery saw a gain of Rs 1,131 or 0.46%, bringing its price to Rs 2,44,455 per kg.
Factors Influencing Prices
Despite the marginal gains, gold prices faced downward pressure primarily due to a stronger US dollar and ongoing commodity index rebalancing. Investor sentiment remained tentative ahead of the eagerly anticipated US non-farm payroll data, which is expected to have significant implications for the metal’s short-term trajectory.
Globally, spot gold experienced a 0.4% decline, settling at $4,458.10 per ounce as of 0126 GMT. Meanwhile, US gold futures for February delivery edged higher by 0.2%, trading at $4,467.60 per ounce. The US dollar index (DXY) climbed by 0.1%, hovering around the 98.95 mark, thereby limiting the appeal of bullion for foreign currency holders.
Domestic Market Trends
In domestic markets, both gold and silver had closed lower the previous day. On Thursday, MCX Gold February futures ended at Rs 1,37,742 per 10 grams, marking a drop of 0.19%. Silver for March futures fared worse, plummeting by 2.91% to Rs 2,43,324 per kilogram. This sell-off was primarily driven by a wave of volatility triggered by significant global developments, which included the annual rebalancing of Bloomberg’s commodity index.
Adding to market anxiety was a proposal from the US President to impose hefty 500% tariffs on BRICS nations for importing Russian crude oil. This announcement spurred panic selling across global financial markets, resulting in significant intraday declines for gold, silver, and other base metals.
Safe-Haven Demand
Despite the upheaval, the long-standing demand for precious metals as safe-haven assets may sustain their prices. Manoj Kumar Jain from Prithvifinmart Commodity Research pointed out that the Chinese central bank has been consistent in its gold purchases, adding 42 metric tonnes since November 2024. This marks the 14th consecutive month of being a net buyer, underscoring a global trend toward de-dollarisation amid prevailing uncertainties.
Strategy for Traders
As volatility continues to be a hallmark of the bullion market, Jain has identified critical support and resistance levels for traders. For gold, support is anticipated between $4,240 per troy ounce and $4,250, while the resistance level ranges from $4,450 to $4,500. On the MCX, gold is expected to find support at Rs 1,37,000 to Rs 1,36,200 and resistance at Rs 1,38,400 to Rs 1,39,100. Silver traders should look for support levels around Rs 2,39,500 to Rs 2,34,400, with resistance set at Rs 2,48,000 to Rs 2,51,500.
Jain advises traders to exercise caution and await price stabilization before entering new positions, noting that the long-term fundamentals for gold and silver remain solid despite short-term fluctuations.
Current Gold Rates in Indian Cities
Gold Price in Delhi
- Standard Gold (22 Carat): Rs 1,04,072 per 8 grams
- Pure Gold (24 Carat): Rs 1,12,144 per 8 grams
Gold Price in Mumbai
- Standard Gold (22 Carat): Rs 1,02,448 per 8 grams
- Pure Gold (24 Carat): Rs 1,10,384 per 8 grams
Gold Price in Chennai
- Standard Gold (22 Carat): Rs 1,02,544 per 8 grams
- Pure Gold (24 Carat): Rs 1,10,384 per 8 grams
Gold Price in Hyderabad
- Standard Gold (22 Carat): Rs 1,02,576 per 8 grams
- Pure Gold (24 Carat): Rs 1,10,472 per 8 grams
As traders navigate this volatile landscape, the market dynamics of gold and silver will continue to be influenced by both domestic and international economic indicators.
