Gold and silver prices have had a positive rebound after falling during recent weeks, reflecting rising hopes for additional interest-rate hikes by the Fed, the US Federal Reserve. Lower buying activity also contributed to support for both precious metals, bringing them back up in both domestic and international markets. This recovery was preceded by a period when prices were under pressure due to the response of market players to changing signals from macroeconomics and monetary policy.

Domestic and international market performance

The gold futures trading at the Multi Commodity Exchange (MCX) in the domestic market commenced with a healthy beginning. The benchmark gold futures contract hit a new all-time high at ₹149,689 per 10 grams, up from its previous close of ₹149,103 per 10 grams. 

As of reporting, the contract was valued at ₹1,49,620 per 10 grams, trading at a price close to ₹1,49,600 per 10 grams. This is a recovery from a market-wide trend, but the gold futures had surged to a high of ₹180773 per ten grams earlier in this year.

At the time of reporting, silver futures were trading on a positive footing on the MCX, with the December silver futures posted at ₹2,23,806 per kg, up ₹245 from Tuesday’s close of ₹2,23,561 per kg. However, even with the intraday rise, silver prices are still far away from their earlier all-time high of ₹4,20,048 per kg.

Gold stocks on Comex also had similar gains on an international basis. Gold futures were around $4,140 per ounce at the beginning of the day, but were quickly lifted by $16.50 while opening at $4,139.90 per ounce, and moving near $4,160 per ounce. Gold had reached its global high of $5,586.20 per ounce earlier this year.

Silver futures for delivery in the United States opened at $60.19 an ounce on Comex, offset a slight decline from the previous close, which closed at $60.29. The metal managed to advance by $0.08 to reach $60.37 per ounce, remaining close to $60.40 per ounce. This present price is in contrast with the earlier peak of $121.79 per ounce recorded in the international market.

Technical levels and market dynamics

Though gold was technically seeing fresh selling pressure, Ajay Kedia, director at Kedia Advisory, has confirmed this. Open interest in gold contracts increased 3.23% to 16,701, as prices in the overall commodity settlement fell by ₹1,017, suggesting fresh bearish interest among commodity traders.

From a technical perspective, gold has immediate support established at ₹1,48,035 per 10 grams. If the price stays below this critical support level, then it can go down further to ₹146965 per 10 grams. However, the positive side is that the resistance is identified at ₹1,50,055 per 10 grams, and breaking that level could take gold to the ₹1,51,005 per 10 grams mark.

As Kedia explained, Silver is chasing a similar fresh selling trend, and that is definitely clear. Open interest of silver grew by 6.83% to 17,728, with prices falling by ₹3,681, indicating greater activity from sellers in the market.

Technical support is at ₹2,21,220 per kg for silver. On the upside, resistance is found at ₹226,055 per kg, while a break above would allow silver to extend towards the ₹228,550 per kg level. Downside targets include ₹218,880 per kg, with a clear move below that level being considered a failure to remain in the cycle.

Conclusion

Gold and silver prices have responded positively to lower prices, indicating that the prices are still drawing buying interest in the face of rate-cut expectations from the Federal Reserve in the US. Intraday gains offered some solace on exchanges across domestic and global Comex, while sustained gains were recorded on markets such as MCX by a number of technical indicators, such as an increase in open interest. Currently, the selling side is being held up by several resistance levels, while the buying side sits at critical support levels, and market participants will closely observe whether the current buying momentum is able to break through the critical resistance or if fresh selling pressure is pushing prices to retest lower support.