Gold prices dropped by almost 1% while silver rates crashed 6% in morning trade on the MCX on Wednesday, December 31, due to profit booking at record high levels. MCX gold February futures dropped 0.77% to ₹1,35,618 per 10 grams, while MCX silver March futures crashed over 6% to ₹2,32,228 per kg. Around 9:15 am, MCX gold was 0.63% down at ₹1,35,800 per 10 grams, while MCX silver was down 6.23% at ₹2,35,373 per kg.
Traders booked profits in precious metals as they are at unprecedented highs, clocking strong gains this year. Domestic spot gold prices have jumped 76% this year, while silver prices have soared almost 170%.
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The primary catalysts driving the rise in gold prices are US Federal Reserve rate cuts and expectations of further rate cuts next year, aggressive central bank buying, heightened geopolitical uncertainties, and robust inflows into exchange-traded funds (ETFs). For silver, additional drivers have been robust industrial demand amid tight supply.
Experts expect the precious metals to experience volatility as they anticipate demand fatigue at higher levels.
Meanwhile, US gold futures for February dropped over 1% to $4,345 per troy ounce, tracking the dollar’s rise against its peers after the minutes of the US Fed’s December meeting showed officials remain divided over the magnitude and timing of additional rate cuts.
The next meeting of the US Federal Open Market Committee (FOMC) is scheduled for January 27-28. Markets are pricing in two rate cuts in 2026, but some experts believe the central bank will maintain a pause in January.
“Gold is easing off recent highs, with some profit-taking setting in after the strong year-end rally. The correction does appear more corrective than trend-changing, though, with broader sentiment still underpinned by global uncertainty and expectations for easier monetary conditions,” said Aksha Kamboj, Vice President at India Bullion and Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures.
“Silver prices are easing after the sharp rise as traders lock in gains after an exceptional rally this year. Despite this pullback, sentiment remains constructive on the back of strong industrial demand and a sustained interest by investors,” Kamboj said.
Gold and silver: Key levels to watch
According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold has support at $4,340 and $4,300, while resistance is at $4,420 and $4,464 per troy ounce, and silver has support at $72 and $68, while resistance is at $82.70 and $88 per troy ounce in today’s session.
On the MCX, gold has support at ₹1,35,200 and ₹1,34,000 and resistance is at ₹1,37,700 and ₹1,39,200, while silver has support at ₹2,40,000 and ₹2,28,000 and resistance is at ₹2,62,000 and ₹2,75,000, said Jain.
According to Rahul Kalantri, VP of commodities at Mehta Equities, gold has support at $4,305 and $4,245, while resistance is at $4,395 and $4,440. Silver has support at $74 and $72.75, while resistance is at $75.95 and $76.80.
In INR, Kalantri said gold has support at ₹1,35,150 and ₹1,33,710 while resistance is at ₹1,38,250 and ₹1,39,670. Silver has support at ₹2,45,150 and ₹2,42,780, while resistance is at ₹2,54,810 and ₹2,56,970.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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