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Gold and Silver Technical Levels: Analysts Advise Waiting for Corrections
Gold and silver prices on the MCX saw mixed action on Friday morning, December 12, following record highs in the previous session. Gold futures edged up modestly, while silver took a breather, reflecting profit booking by investors.
MCX Gold and Silver Performance
At around 9:10 am, MCX gold February contracts traded at ₹1,32,599 per 10 grams, up 0.10%, while MCX silver March contracts fell 0.50% to ₹1,97,951 per kg. The previous session had been notable for MCX silver, which hit an all-time high of ₹1,98,814 per kg and closed 5.33% higher at ₹1,98,799. Gold February futures had settled at ₹1,32,469 per 10 grams, gaining 2%.
Impact of US Federal Reserve Rate Cut
The recent rally in precious metals was fueled by a 25 basis point cut in the US federal funds rate by the Federal Reserve, coupled with signals of another potential rate reduction next year. Manoj Kumar Jain, commodity analyst at Prithvifinmart, noted:
“Gold and silver posted solid gains after the FOMC meeting outcomes. The US Fed cuts interest rates by 25 basis points as per market expectations. The dollar index slipped to a two-month low after the FOMC meeting outcomes and supported gold and silver prices.”
Indeed, the dollar index slid to 98.30, making gold cheaper for overseas buyers and enhancing demand. Meanwhile, the Indian rupee remained at record lows against the dollar, offering additional support to domestic gold prices.
Market Focus on Upcoming US Economic Data
Investors are now eyeing next week’s US inflation data and non-farm payrolls report, which could provide fresh cues on the Fed’s monetary policy direction. Amid these developments, Jain expects volatile trading in gold and silver in the short term.
“We suggest waiting for some corrective dips for initiating fresh long positions in gold and silver, and also suggest strictly avoiding short selling in both precious metals,” he added.
Technical Levels and Support/Resistance
Gold in US dollars has support at $4,264 and $4,220, with resistance at $4,355 and $4,400 per troy ounce. Silver support is at $63.50 and $62.40, while resistance lies at $65 and $67.40 per troy ounce.
For MCX contracts in INR, gold support is pegged at ₹1,31,660 and ₹1,31,000, with resistance at ₹1,33,300 and ₹1,34,000. Silver support stands at ₹1,96,600 and ₹1,94,400, and resistance at ₹2,00,000 and ₹2,04,000.
Analyst Views on Market Strategy
Jigar Trivedi, Senior Research Analyst at Reliance Securities, recommends waiting for a 7–10% correction in silver before entering long positions, either via ETFs or futures, for investment purposes. He also anticipates MCX gold February futures could rise to ₹1,33,000 per 10 grams.
Rahul Kalantri, VP of commodities at Mehta Equities, provided his technical outlook:
- Gold in USD: Support at $4,230 and $4,185, resistance at $4,310 and $4,345
- Silver in USD: Support at $63 and $62.35, resistance at $64.40 and $64.95
- Gold in INR: Support at ₹1,31,450 and ₹1,30,550, resistance at ₹1,33,150 and ₹1,34,900
- Silver in INR: Support at ₹1,96,950 and ₹1,95,200, resistance at ₹2,00,550 and ₹2,01,700
Investor Takeaways
The market is witnessing profit booking after record highs, and the impact of global monetary policy, particularly the US Fed’s rate cuts, remains a critical driver. Analysts suggest caution amid volatility, with opportunities potentially arising after corrective dips.
The interplay between a weaker dollar, a softening rupee, and upcoming US economic indicators is likely to keep gold and silver prices under close watch in the coming sessions.
