Gold prices fell sharply on the MCX on Monday, with the yellow metal slipping below the key Rs 1,50,000 mark as international gold prices came under pressure from rising oil prices and expectations of further interest-rate hikes by the US Federal Reserve.
At around 11:14 am on Sept. 28, the October gold futures contract is trading at Rs 1,47,989 per 10 grams on MCX, down 1.92% from its previous close of Rs 1,50,881. The contract slipped to Rs 1,47,667 earlier in the day, taking the fall from the previous close to more than Rs 3,200.
Why Is Gold Falling Today?
Today, spot gold fell more than 2%, which is the biggest daily decline since Sept. 1.
The decline came as oil prices inched up amid concerns over inflation and further escalating Middle East tensions, especially after Trump rejected Iran's peace deal, which in turn has been raising expectations of further Federal Reserve rate hikes.
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As gold does not generate any interest income, the stronger rate-hike outlook weighs on non-yielding assets like the yellow metal.
Furthermore, the dollar also hit a fresh two-month high last week as Treasury yields rose and expectations of further Fed hikes strengthened, which is also weighing on gold prices.
Gold Price Outlook
The sharp correction has also weakened the technical setup for MCX gold.
Ponmudi R, CEO of Enrich Money, said the metal has broken below the Rs 1,50,000 - Rs 1,50,700 zone, which had earlier acted as support and could now turn into resistance. Gold has also slipped below its 100-day EMA.
“Immediate resistance is at Rs150,000- Rs 150,700, followed by Rs 152,000- Rs152,600. On the downside, immediate support is at Rs 147,300- Rs148,000, followed by Rs145,300- Rs 146,000, near the 200-day EMA,” Ponmudi said.
He added that the RSI at 37.48, below its signal line, indicates weak momentum. “The bias has turned negative, with a sustained move above Rs 150,000 needed to stabilize the setup,” he said.
He further warned that a decisive break below Rs 1,48,000 could expose MCX gold to further downside towards Rs 1,46,000.
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