Gold Gives Up Early Gains on MCX, While Silver Extends Rally; Weak US Jobs Data Supports Global Bullion Prices
Gold and silver prices presented a mixed picture in domestic markets on Monday, with gold futures giving up their early gains while silver continued to trade higher. In international markets, both precious metals advanced as weaker-than-expected jobs data strengthened expectations that the US Federal Reserve may adopt a less aggressive approach to monetary policy.
On the Multi Commodity Exchange (MCX), the benchmark December gold contract opened strongly, gaining ₹807 to ₹1,51,197 per 10 grams against the previous close of ₹1,50,390. However, the initial strength failed to hold.
At the time of reporting, the contract was trading at around ₹1,49,425 per 10 grams, down ₹965 from the previous close.
Silver, meanwhile, maintained its upward momentum, with the benchmark December contract trading at ₹2,26,800 per kg, up ₹923 from the previous close.
Gold Opens Higher but Loses Momentum
The early movement in gold suggested renewed buying interest, but prices subsequently came under pressure.
The December gold contract opened at ₹1,51,197 per 10 grams before reversing direction. The decline brought the contract back below the ₹1.50 lakh mark during the session.
The reversal indicates that traders remain cautious at elevated price levels, even as the broader global environment continues to provide support to bullion.
Gold futures had reached a high of ₹1,80,779 per 10 grams earlier this year, highlighting the considerable volatility that has characterised the precious-metals market.
Silver Continues to Outperform Gold
Silver remained comparatively stronger during Monday's session.
The December silver contract opened at ₹2,25,900 per kg, marginally above its previous close of ₹2,25,877. The contract subsequently gained ₹923 to trade near ₹2,26,800 per kg.
Silver's performance has benefited from both investment demand and its industrial applications, making the metal sensitive to developments in monetary policy as well as expectations for global economic activity.
Silver futures had previously touched a high of ₹4,20,048 per kg earlier this year, underscoring the sharp swings seen in the metal.
Weak US Jobs Data Supports Bullion
The broader global backdrop remained supportive for precious metals.
Gold and silver gained in international markets after weaker-than-expected US jobs data encouraged traders to reduce expectations of further monetary tightening by the Federal Reserve.
A softer employment picture can influence expectations for interest rates because a cooling labour market may reduce pressure on the US central bank to maintain restrictive monetary policy.
Lower expectations for interest rates generally support non-yielding assets such as gold by reducing the relative opportunity cost of holding bullion.
Gold Trades Above $4,170 an Ounce
On the Comex, gold opened at around $4,169.40 per ounce, compared with the previous closing price of $4,162.30.
At the time of reporting, the metal was trading around $4,172.10 per ounce, representing a gain of $9.80.
Earlier this year, Comex gold had reached a high of $5,586.20 per ounce, showing the extraordinary price range witnessed in the global gold market.
The direction of US Treasury yields, the dollar and expectations surrounding Federal Reserve policy are likely to remain important drivers for the metal.
Silver Holds Above $61 Per Ounce
International silver prices also strengthened.
Comex silver opened at approximately $60.70 per ounce against the previous close of $60.41. It was subsequently trading around $61.57 per ounce, up $1.16.
Silver had previously reached a high of $121.79 per ounce earlier this year.
The metal's combination of precious-metal characteristics and industrial demand means that its price can respond to both interest-rate expectations and the outlook for manufacturing and economic activity.
Domestic and International Prices Diverge
The difference between domestic and international price movements is an important feature of Monday's bullion trade.
While global gold prices were higher, domestic MCX gold moved lower after its strong opening. Currency movements, local positioning, profit-taking and differences in trading conditions can all influence domestic bullion prices.
The contrasting performance also highlights why investors need to track both international benchmark prices and domestic futures rather than relying on a single market indicator.
Gold Support at ₹1,49,570
According to Ajay Kedia, director at Kedia Advisory, gold has immediate support around ₹1,49,570 per 10 grams.
A sustained decline below this level could push the metal towards the next support near ₹1,48,750.
On the upside, resistance is placed around ₹1,50,975. A decisive move above this level could open the way towards ₹1,51,560.
These levels are likely to be important for short-term traders as gold attempts to establish its next directional move following the recent volatility.
Silver Support at ₹2,24,295
Silver's immediate support is seen around ₹2,24,295 per kg.
A break below this level could expose the metal to further downside towards ₹2,22,715.
On the upside, resistance is placed near ₹2,27,175. A sustained move above this level could take silver towards ₹2,28,475.
The ability of silver to hold above the ₹2.25 lakh zone could therefore remain important for maintaining its current short-term momentum.
Interest Rates and Dollar Remain Key Drivers
The outlook for gold and silver will continue to depend heavily on expectations surrounding US monetary policy.
If incoming economic data points towards slowing growth and softer inflationary pressures, expectations of easier monetary policy could strengthen, potentially supporting bullion.
Conversely, stronger economic data, higher Treasury yields or renewed strength in the US dollar could limit gains.
For gold in particular, the dollar-yield combination remains one of the most important short-term variables.
Silver Has an Additional Industrial Demand Factor
Silver's outlook differs from gold because of its substantial industrial use.
The metal is widely used in electronics, solar-related applications and other industrial processes. As a result, expectations for manufacturing activity, technology investment and clean-energy infrastructure can influence demand.
This gives silver an additional potential source of support compared with gold, although it can also make the metal more sensitive to signs of an economic slowdown.
Investors Watch Volatility After Record-High Moves
Both gold and silver have experienced substantial price swings this year. The distance between their earlier highs and current levels highlights the importance of risk management for traders.
Large price movements can create opportunities but also increase the risk of sharp reversals.
For investors with a longer-term horizon, the key factors remain global monetary policy, central-bank buying, geopolitical developments, inflation expectations and currency movements. Short-term traders, meanwhile, are likely to focus more closely on the technical levels around current prices.
Market Outlook
Gold's Monday session reflects a tug-of-war between supportive global fundamentals and profit-taking or selling pressure in the domestic futures market. The metal received support from weaker US jobs data and expectations of less aggressive monetary tightening, but failed to sustain its early MCX gains.
Silver is showing comparatively stronger momentum, with both domestic and international contracts trading higher. Its industrial demand profile provides an additional factor supporting the metal, although its historically high volatility warrants caution.
For gold, ₹1,49,570 remains an important near-term support, while ₹1,50,975 is the key resistance zone. For silver, ₹2,24,295 and ₹2,27,175 are the important immediate support and resistance levels, respectively.
Going ahead, movements in the US dollar, Treasury yields, Federal Reserve expectations and fresh economic data are likely to determine the next major direction for precious metals. A sustained break above resistance could revive bullish momentum, while a failure to hold key support levels could trigger further profit-taking.