Gold price fell on Tuesday after hitting a more than three-month high, while silver rate stood at $68 as profit-taking and stronger dollar limited the gains.
Spot gold dipped 0.25% to $4,639.56, while silver slipped 0.44% to around $68.5/oz on Tuesday, August 25 by 10:33 pm IST.
Bullion prices in India fell too, with MCX gold October futures contract declined 0.18% to Rs 1,62,900 per 10 grams, while MCX silver September futures contract dropped 0.16% to Rs 2,43,829 per kg.
Gold, Silver Outlook: What Could Drive Prices Next?
According to Kotak Securities, gold's underlying support remains strong, driven by renewed debasement concerns after the U.S. Treasury expanded longer-dated bond buybacks. Meanwhile, gold-backed ETFs saw 46.7 metric tons of inflows last week, highest weekly demand in 10 months.
In near term upside , however, is likely to witness resistance from a firm dollar and higher US Federal Reserve rate hike expectations. At present, markets pricing a 42% possibility of a rate hike in September. Additionally, traders will also focus on Wednesday's PCE inflation data and Fed Chairman Kevin Warsh's Jackson Hole speech for the bullion's next course. Geopolitical tensions have also intensified as Iran plans to retaliate against more US sanctions.
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"Fundamental outlook remains bullish over the medium term, but near-term volatility and profit-taking risks remain elevated," Kotak said.
Technical Levels To Watch
Kotak expects Spot Gold to face support at $4,605. If this level is breached, then the metal will find next key support at $ 4,580.9. A further downside will move the next support $4,502.8 level. Resistance is seen at $ 4,683, followed by $ 4,707.1 and $4,785.1.
In case of MCX Gold October futures, support levels are placed at Rs 1,62,271, Rs 1,61,643 and Rs 1,59,610. Analysts expect resistance level at Rs 1,64,303, Rs 1,64,931 and Rs 1,66,964.
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In terms of silver, Kotak estimates support for Spot Silver at $67.86, followed by $67.26 and further downside of $65.32. Resistance is seen at $69.8, $70.4 and $72.34.
On MCX, Silver is likely to face support at Rs 2,43,414, Rs 2,42,049 and Rs 2,37,630. Resistance is placed at Rs 2,47,834, Rs 2,49,199 and Rs 2,53,618.
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