Gold and silver recover after recent declines as investors return to bullion at lower levels; MCX gold trades near ₹1.50 lakh while silver remains above ₹2.23 lakh
Gold and silver prices staged a recovery on Thursday as investors stepped in to buy at lower levels following recent declines. The rebound came after precious metals had faced selling pressure amid expectations of further interest-rate increases by the US Federal Reserve.
On the domestic market, the benchmark December gold futures contract on the Multi Commodity Exchange (MCX) opened ₹586 higher at ₹1,49,689 per 10 grams, compared with the previous close of ₹1,49,103. The contract was later trading around ₹1,49,620, up ₹517.
Silver also opened higher, with the benchmark December contract gaining ₹245 to ₹2,23,806 per kg from the previous close of ₹2,23,561. It was subsequently trading around ₹2,23,891, up ₹330.
Gold Rebounds After Recent Selling
The recovery in gold came as buyers returned after the metal's recent weakness.
In the international market, Comex gold futures opened at around $4,139.90 an ounce against the previous close of $4,140.70. The contract subsequently moved up to around $4,157.20, representing a gain of $16.50.
The rebound indicates that investors remain willing to accumulate bullion when prices decline, despite uncertainty surrounding the future path of US monetary policy.
Gold continues to attract demand as a traditional hedge against economic and geopolitical uncertainty, although higher interest rates can reduce the appeal of non-yielding assets.
Silver Also Moves Higher
Silver followed gold higher during Thursday's trading session.
Comex silver futures opened at $60.19 an ounce against the previous close of $60.29 and later moved up to around $60.37.
On MCX, silver futures opened at ₹2,23,806 per kg and subsequently traded around ₹2,23,891.
Silver remains significantly below its earlier high of ₹4,20,048 per kg in the domestic futures market, highlighting the extent of volatility witnessed in the precious-metal market.
Lower-Level Buying Supports Bullion
The latest rebound appears to have been driven primarily by buying at lower price levels.
Gold and silver had declined over recent sessions as investors reassessed the outlook for US interest rates. Expectations of tighter monetary policy can weigh on precious metals because higher interest rates increase the opportunity cost of holding assets that do not generate regular income.
However, sharp declines can also attract bargain hunters, particularly when investors continue to view bullion as a portfolio hedge.
The latest move suggests that buying interest remains present even though the broader technical setup remains cautious.
Gold Technical Levels to Watch
According to Ajay Kedia, director at Kedia Advisory, gold has been witnessing fresh selling pressure from a technical perspective.
Open interest increased 3.23 per cent to 16,701 while prices declined by ₹1,017 in the previous session. The combination suggested the creation of fresh bearish positions.
For traders, ₹1,48,035 is an important support level for gold. A sustained break below this level could push prices towards ₹1,46,965.
On the upside, ₹1,50,055 is the immediate resistance zone. A decisive move above this level could open the way towards ₹1,51,005.
The ability of gold to sustain levels above ₹1.50 lakh will therefore be important in determining whether the latest recovery develops into a stronger rebound or remains a short-term bounce.
Silver Technical Levels Remain Crucial
Silver's technical structure also remains cautious despite Thursday's recovery.
Kedia noted that open interest increased 6.83 per cent to 17,728 while prices declined by ₹3,681 in the previous session, indicating increased bearish participation.
The immediate support for silver stands at ₹2,21,220. A sustained fall below this level could take prices towards ₹2,18,880.
On the upside, ₹2,26,055 remains an important resistance level. A decisive breakout above this zone could help silver recover towards ₹2,28,550.
US Interest Rates Remain the Biggest Macro Trigger
The outlook for precious metals remains closely linked to US monetary policy.
Expectations of additional interest-rate increases can put pressure on gold and silver because higher yields make interest-bearing assets relatively more attractive.
Conversely, any indication of a softer monetary-policy outlook could support bullion by lowering real-yield pressures and weakening the dollar.
Investors will therefore continue to track US inflation data, employment indicators, Federal Reserve commentary and movements in US Treasury yields.
Dollar and Geopolitical Risks Could Drive Volatility
Movements in the US dollar will also remain important for international gold prices.
A stronger dollar can make dollar-denominated bullion more expensive for buyers using other currencies, potentially limiting demand. A weaker dollar, on the other hand, can provide support to gold and silver.
Geopolitical tensions remain another important factor. Any escalation in global conflicts or concerns over financial stability could increase demand for traditional safe-haven assets.
Gold and Silver Remain Highly Volatile
The precious-metals market has experienced significant price swings, making risk management increasingly important for traders.
Gold had previously touched a high of ₹1,80,779 per 10 grams in the domestic futures market, while silver had reached ₹4,20,048 per kg. Internationally, gold had touched $5,586.20 an ounce and silver had reached $121.79 an ounce earlier in the year.
The distance from those highs illustrates the extent of the correction and volatility across the metals complex.
Market Outlook
Gold and silver have received some support from lower-level buying, but the broader trend remains sensitive to interest-rate expectations, the US dollar, global bond yields and geopolitical developments.
For gold, traders will closely watch the ₹1,48,035 support and ₹1,50,055 resistance levels. A break below support could extend the correction towards ₹1,46,965, while a decisive move above resistance could strengthen the recovery towards ₹1,51,005.
For silver, ₹2,21,220 remains the key downside level, while ₹2,26,055 is the important resistance zone. A breakout above the latter could open the path towards ₹2,28,550.
The immediate recovery suggests that investors are willing to buy bullion on declines, but traders should remain cautious as elevated open interest and recent price weakness point to continuing bearish participation. The next major direction for precious metals is likely to be determined by US monetary-policy expectations, currency movements and global risk sentiment.