Gold and silver prices extended their decline on Wednesday, Oct. 14, as investors weighed the outlook for US interest rates ahead of key inflation data. On the Multi Commodity Exchange, December gold futures slipped below Rs 1,48,000 during the session, while silver futures fell by more than Rs 2,000 per kg.
At 11:53 a.m., MCX December gold futures were trading at Rs 1,48,090 per 10 grams, down Rs 360, or 0.24%, from the previous close of Rs 1,48,450. December silver futures fell Rs 1,537, or 0.7%, to Rs 2,17,680 per kg, compared with the previous close of Rs 2,19,217.
Earlier in the day, silver futures declined to Rs 2,17,022 per kg, witnessing a fall of Rs 2,195 from its previous close. Similarly, gold also declined to the Rs 1,47,563 level earlier in the day, slipping by close to Rs 800 per gram.
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Why Are Gold And Silver Prices Falling?
Uncertainty over the US Federal Reserve's interest-rate outlook is weighing on precious metals. Investors are awaiting US consumer price index data, due Wednesday, followed by producer price inflation figures on Thursday, to assess whether inflation will remain elevated and what that could mean for interest rates.
The yellow metal also edged lower on Tuesday as investors waited for these data releases and remarks from Federal Reserve Chair Kevin Warsh. Markets are assessing whether inflationary pressures could keep borrowing costs higher for longer, reducing the appeal of gold, which does not pay interest.
A stronger rupee is also limiting domestic gold prices. The Indian currency strengthened after the Reserve Bank of India introduced measures to curb dollar demand and stabilise the foreign exchange market. A stronger rupee makes dollar-priced gold cheaper in domestic currency terms, offsetting some of the impact of international price movements.
Silver is facing additional pressure after its sharp decline in the international market. However, industrial demand could help limit further losses, even as interest-rate expectations remain a key near-term driver.
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Technical Outlook
Ponmudi R, CEO of Enrich Money, expects gold and silver to remain under pressure unless they reclaim key resistance levels.
For MCX gold, the Rs 1,50,000 to Rs 1,50,700 range is the immediate resistance zone, while support lies between Rs 1,47,300 and Rs 1,48,000. A sustained move above Rs 1,50,000 could help stabilise prices. However, a decisive break below Rs 1,48,000 could drag gold towards Rs 1,46,000.
The relative strength index, or RSI, at 42.93 remains below its signal line, while the moving average convergence divergence, or MACD, histogram is marginally negative, indicating a cautious trend.
For MCX silver, immediate support is at Rs 2,19,000 to Rs 2,20,000, followed by Rs 2,14,000 and Rs 2,15,000. Resistance is placed at Rs 2,23,000 to Rs 2,24,000, with the next hurdle at Rs 2,28,000 and Rs 2,29,000. Its RSI at 36.46 is approaching oversold territory, signalling continued weakness.
In the case of silver, a sustained move above Rs 2,20,000 would help the white metal stabilise, while a decisive break below Rs 2,18,000 could open the way towards Rs 2,15,000.
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