Gold and silver prices fell on MCX due to profit booking by traders
Mumbai: Gold and silver prices fell in early trading on the Multi Commodity Exchange (MCX) on Monday morning, as traders booked profits after the recent rally.
The decline came amid weak demand in the spot market, although losses were limited as the US dollar weakened and investors anticipate that the US Federal Reserve will announce an interest rate cut this week.
During early trading, MCX gold futures for February delivery were trading 0.04 percent lower at ₹1,30,409 per 10 grams. Experts said, “MCX gold remains within a rising channel pattern and is currently hovering around the ₹1,30,300-1,30,400 zone after facing rejection near ₹1,32,250, which is now acting as immediate resistance.”
MCX silver futures for March delivery fell 1 percent to ₹1,81,600 per kilogram.
This marginal decline followed strong gains in the previous session, when gold futures rose 0.30 percent to close at ₹1,30,462 per 10 grams and silver futures surged nearly 3 percent to settle at ₹1,83,408 per kilogram, after touching a new record high of ₹1,85,234 during the day.
Precious metals prices remain highly volatile as investors await the outcome of the US Federal Open Market Committee (FOMC) meeting on December 10.
The US central bank will announce its policy decision at a time when economic indicators are giving mixed signals.
The Personal Consumption Expenditures (PCE) price index, the Fed’s preferred measure of inflation, rose 0.3 percent in both August and September.
On an annual basis, it increased from 2.7 percent in August to 2.8 percent in September – indicating that inflation is still slightly elevated. At the same time, growing expectations of interest rate cuts have put pressure on the US dollar. The dollar index is hovering around a six-week low of 98.76, a level last seen on December 4.
A weaker dollar makes gold cheaper for buyers using other currencies, helping to limit the decline in the precious metal. Analysts said that volatility in the gold and silver markets will likely persist until the Federal Reserve provides more clarity on its interest rate policy.
