Gold and silver prices experienced a decline on the Multi Commodity Exchange on Tuesday, influenced by a stronger US dollar that exerted pressure on bullion. Investors are closely monitoring the upcoming Federal Reserve policy meeting this week for indications regarding the future trajectory of interest rates. In the domestic market, MCX silver futures for December 2026 delivery experienced a decline of Rs 2,400, bringing the price to Rs 1,93,555 per kg. Gold futures for December 2026 delivery decreased by Rs 500, settling at Rs 1,42,581 per 10 grams. Federal Reserve policymakers are anticipated to maintain US short-term borrowing costs at their current levels during this week’s meeting. However, ongoing inflation concerns have heightened expectations that the cessation of rate hikes may be temporary. Investors are anticipating the Federal Reserve’s policy decision on Wednesday, along with the release of the Personal Consumption Expenditures data scheduled for Thursday.
The PCE index serves as a crucial inflation metric observed by the central bank, which aims for a 2% inflation rate. Traders are currently assigning an 11% likelihood to a rate hike occurring this week, while the probability of an increase in December stands at 82%, as indicated by the CME FedWatch Tool. Gold is frequently viewed as a safeguard against inflation; however, elevated interest rates generally exert pressure on the demand for this non-yielding metal. On the geopolitical front, senior officials from Saudi Arabia, Turkey, and Pakistan convened with Iranian officials in Tehran on Monday, aiming to alleviate tensions in the Middle East. Spot gold decreased by 0.1% to $4,013.70 per ounce as of 0045, while US gold futures for December delivery saw a decline of 0.3% to $4,027.10.
A stronger dollar increases the cost of gold, which is denominated in US currency, for purchasers utilising alternative currencies. Spot silver increased by 0.1% to $53.97 per ounce, platinum remained unchanged at $1,527.81, whereas palladium decreased by 0.7% to $1,042.43. Manoj Kumar Jain asserts that gold prices may maintain their crucial support level of $3,940 per troy ounce, while silver prices could similarly sustain their support level of $51.80 per troy ounce on a weekly closing basis. Gold and silver prices are anticipated to exhibit volatility this week, influenced by fluctuations in crude oil prices, movements in the dollar index, the upcoming FOMC meetings, and prevailing geopolitical tensions. Gold exhibits support levels between $4000 and $3984, with resistance identified in the range of $4055 to $4092 per troy ounce.
In contrast, silver shows support at $53.50 to $52.80, while its resistance is positioned between $55.50 and $56.40 per troy ounce in the current session, he noted. At MCX, gold exhibits support levels between Rs 1,42,400 and Rs 1,41,800, while resistance is observed in the range of Rs 1,43,650 to Rs 1,44,200. In contrast, silver shows support at Rs 1,94,000 to Rs 1,92,200, with resistance positioned between Rs 1,97,200 and Rs 1,99,600. “We suggest long-term investors can accumulate gold and silver in this market fall but traders must be cautious ahead of the FOMC meeting and US midterm elections,” Manoj said.
