Gold and silver prices will attract attention on Thursday following a significant overnight drop in crude oil prices, which experienced its largest single-day decline since May of this year. Gold surged 5% to cross $4,100 per ounce, marking its largest single-day increase since mid-August. Silver also climbed past the $50 per ounce mark, rising 6%. Both precious metals exhibited a robust rebound from the significant declines observed in October, with silver taking the lead in the recovery. Lower borrowing costs and a depreciated dollar contributed additional support to bullion prices. In international markets on Wednesday, gold December futures settled at $4,073.00 per troy ounce, reflecting an increase of 3.37%, while silver December futures closed at $52.282 per troy ounce, marking a rise of 5.08%. Domestic futures also concluded on an upward trajectory. Gold December contracts settled at Rs 1,43,234 per 10 grams, reflecting an increase of 2.71%, while silver December futures appreciated by 4.47% to close at Rs 1,87,735 per kg.
The sharp correction in oil prices is noteworthy, particularly as crude had experienced a significant rally in the aftermath of the US-Iran conflict. The decline alleviated apprehensions regarding additional rate increases by the Federal Reserve, significantly benefiting gold and silver markets. Crude oil continued to decline, while the dollar experienced a downturn following the Democrats’ successful midterm elections, securing dominance in both the Senate and the House of Representatives. The outcome has heightened expectations that the Republican Party will face increased pressure to conclude the conflict with Iran and pursue a negotiated settlement. Manoj Kumar Jain attributed the recovery to easing inflation concerns following the decline in oil prices, a weakened dollar index, softer US bond yields, and the potential conclusion of the US-Iran conflict. Jain noted that bullion markets had already reached a significantly oversold condition, suggesting potential for a rebound driven by a favourable catalyst.
According to Jain, gold could extend its gains toward $4,140-4,220 if prices sustain above $4,000. Silver may advance to the range of $55-57 per troy ounce, contingent upon maintaining a position above $52. However, both metals are anticipated to exhibit volatility this week, influenced by variations in crude oil prices, the dollar index, and US employment data. For the international market, Jain identifies support for gold in the range of $4,022-3,980 per troy ounce, while resistance is positioned at $4,140-4,174. Silver exhibits support within the range of $51.20 to $50.00 per troy ounce, while encountering resistance between $54.00 and $55.20. On the MCX, gold exhibits support levels at Rs 1,42,000-1,41,400 and resistance levels at Rs 1,44,400-1,45,500. Silver exhibits support within the range of Rs 1,85,500 to Rs 1,83,000, whereas resistance is identified between Rs 1,91,100 and Rs 1,94,400. Jain advises purchasing gold within the range of Rs 1,42,400 to Rs 1,41,000, suggesting a stop loss positioned below Rs 1,40,000 and aiming for a target between Rs 1,44,400 and Rs 1,45,500. For silver, he recommends purchasing within the range of Rs 1,86,000 to Rs 1,83,000, setting a stop loss beneath Rs 1,79,800, and aiming for a target between Rs 1,91,100 and Rs 1,94,400.
On the international front, Bank of America expects gold prices to remain below $4,000 over the next three months, although it forecasts an average price of $4,000 an ounce in the fourth quarter. The demand tracker reveals that purchases by key buyers experienced a decline of 16.6% year-on-year. Imports into India decreased by 77.8%, whereas imports into China experienced an increase of 39.3%. Jewellery demand has faced significant pressure. Data from the World Gold Council indicates a significant decline in jewellery demand, with a 25% decrease in the United States, a 15% drop in India, and a 28% reduction in China during the second quarter. Vise President JD Vance, in an extensive post subsequent to the election defeat, indicated that voter discontent regarding the war and the US-Israel relationship played a role in the Republicans’ loss. Senate Minority Leader Chuck Schumer affirmed that Democrats are committed to expediting an end to the war. In a recent statement to the Financial Times, Donald Trump indicated that there were no immediate plans to escalate attacks on Iran, even as polling was still in progress. He also acknowledged that it was “largely true” that the war had contributed to the Republican defeat.
