Gold and silver prices traded lower on the Multi Commodity Exchange (MCX) on Wednesday as easing geopolitical tensions and caution ahead of the US Federal Reserve's policy decision prompted some profit-taking in precious metals.
Investors looking to trade bullion can consider buying spot silver near $68.25 and booking profits around $71.95, according to Kotak Securities. For domestic markets, the brokerage has identified a buying zone of Rs 1,51,330 and a selling zone of Rs 1,54,186 for MCX Gold August futures. For MCX Silver July futures, the buying zone is Rs 2,45,214, while the selling zone is Rs 2,54,514.
For spot silver, support is seen at $66, $68.25 and $68.95, while resistance levels are placed at $71.25, $71.95 and $74.20.
MCX Gold August futures have support at Rs 1,49,565, Rs 1,51,330 and Rs 1,51,875. Resistance levels are seen at Rs 1,53,641, Rs 1,54,186 and Rs 1,55,951.
For MCX Silver July futures, support levels are placed at Rs 2,39,466, Rs 2,45,214 and Rs 2,46,990, while resistance is seen at Rs 2,52,738, Rs 2,54,514 and Rs 2,60,262.
Fed Decision In Focus
Investor attention is firmly on the upcoming Federal Open Market Committee (FOMC) meeting, the first under US Federal Reserve Chair Kevin Warsh.
According to Kotak Securities in its note on Tuesday, markets have reduced expectations of further monetary tightening, with the probability of a December rate hike easing to 56% from nearly 70% earlier.
"Any indication of a softer or more accommodative stance could provide additional support to bullion prices," the brokerage said.
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Lower interest rate expectations generally support precious metals by reducing the opportunity cost of holding non-yielding assets such as gold and silver.
Despite weakness in domestic futures, gold remained elevated in international markets.
The precious metal traded around $4,335 an ounce after rising more than 6% over the previous four sessions. Prices have been supported by expectations that the US and Iran may sign an interim peace agreement, potentially easing concerns over global inflation and economic disruption.
Kotak Securities said lower rate-hike expectations, continued central bank purchases and portfolio diversification trends remain supportive for bullion.
Citing World Gold Council data, the brokerage noted that 45% of global reserve managers plan to increase gold holdings over the next year.
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