Gold and silver prices fell sharply on Thursday, Sept. 17, after the US Federal Reserve raised interest rates and signalled that borrowing costs could rise further, putting pressure on non-yielding bullion.
On the Multi Commodity Exchange (MCX), gold futures for October delivery fell to an intraday low of Rs 1,50,483 per 10 grams in the early hours, down by Rs 1,987 from Wednesday's close of Rs 1,52,470. Gold prices were trading at Rs 1,50,849, down Rs 1,621, or 1.06%.
Similarly, MCX silver futures for December delivery also crashed to Rs 2,30,221 per kg, marking a fall of Rs 4,565 from its previous close of Rs 2,34,786 earlier today. Silver rate was trading at Rs 2,32,100, down Rs 2,686, or 1.14%.
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The initial reaction in international markets was also negative. Spot gold fell more than 1% on Wednesday after the Fed decision, touching $4,240.10 an ounce, while the dollar strengthened.
However, international gold prices recovered on Thursday as investors assessed the Fed's outlook, and later spot gold rose 0.8% to $4,295.26 an ounce, while silver gained 1.2% to $63.73 an ounce.
Why Gold, Silver Prices Are Falling
The US Federal Reserve raised its benchmark interest rate by 25 basis points to 3.75%-4% on Wednesday, its first rate increase since 2023. The decision was unanimous, while the latest projections indicated that most policymakers expect at least one more rate hike this year.
A higher-interest-rate environment tends to weigh on gold and silver as it increases the opportunity cost of holding assets that do not generate interest. The Fed's decision also pushed the US dollar higher, adding further pressure on dollar-priced bullion.
Also Read: How US Fed Rate Hike Will Impact Gold Prices — Key Factors To Watch
Gold Price Outlook
MCX gold opened with a sharp gap-down near the Rs 1,50,700– Rs 1,50,000 support zone, around its 100-day EMA, mirroring the post-Fed rate hike decline in COMEX gold.
According to Ponmudi R, CEO of Enrich Money, gold needs to reclaim and sustain above Rs 1,53,000 to regain momentum. A break above this level could open the way towards the next resistance at Rs 1,54,000– Rs 1,54,700.
Immediate support for MCX gold price is placed at Rs 1,50,700– Rs 1,50,000, followed by the next support zone at Rs 1,48,000– Rs 1,47,300.
“Domestic gold remains under pressure following the hawkish Fed outcome, while fresh weakness in the rupee is providing only a partial offset. The bias remains cautiously weak below Rs 1,53,000, and a sustained reclaim of this level is needed to stabilise prices. A break below Rs 1,50,000 could trigger a decline towards Rs 1,48,000,” said Ponmudi R.
Silver Price Outlook
For MCX silver, the immediate resistance is at Rs 2,33,000– Rs 2,34,000. A decisive break above this zone could push prices towards the next resistance at Rs 2,36,000.
On the downside, immediate support is placed at Rs 2,30,000– Rs 2,29,000, followed by Rs 2,26,000– Rs 2,25,000.
According to Ponmudi, the bias remains cautiously weak below Rs 2,33,000. Silver needs to hold above Rs 2,30,000 to stabilise, while a break below this level could expose prices to a deeper correction towards Rs 2,26,000.
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