Gold and silver futures faced significant selling pressure last week, with gold retreating 1.9% domestically and silver dropping 3.8%. The decline follows global trends where rising US bond yields and interest rate uncertainty have reduced the appeal of non-yielding assets. Investors are now monitoring key technical support levels as market sentiment remains cautious in the near term.
Precious metals faced a tough week as both global and domestic markets adjusted to shifting economic expectations. On the Multi Commodity Exchange (MCX), December gold futures settled near ₹1,50,390 per 10 grams, marking a 1.9% decline, while silver futures fell 3.8% to close at ₹2,25,877 per kilogram. This pullback mirrored a broader global retreat, with gold prices dipping to $4,141 per ounce and silver to $60.40 per ounce.
The primary pressure on these metals stems from the global interest rate environment. When US Treasury yields rise and the US dollar strengthens, the appeal of gold—which does not pay interest—often decreases. Traders are reacting to concerns that the US Federal Reserve may keep interest rates higher for longer to manage inflation, a sentiment that typically weighs on bullion prices and drives investors toward yielding assets like bonds.
Market participants are now evaluating key support zones to see where the selling might slow down. For gold, the range between ₹1,48,000 and ₹1,51,000 is critical. Traders are monitoring whether prices can hold above the ₹1,44,000 mark, which is viewed as a vital support level. If prices fail to hold here, it could indicate further weakness. Conversely, reclaiming the ₹1,52,000 level would be required to shift the current bearish sentiment toward a more neutral or positive outlook.
Silver has shown higher volatility, with analysts watching the ₹2,19,000 level closely. This price point is considered a fundamental floor for the metal. A breach of this support could trigger further selling toward the ₹2,10,000 mark, while a recovery would require the metal to reclaim the ₹2,30,000 threshold. Given silver’s dual role as both a precious and industrial metal, it tends to be more sensitive to shifts in global economic growth expectations than gold.
It is important for investors to remember that bullion prices are highly sensitive to macroeconomic data, particularly US labor market figures and central bank policy commentary. While technical support levels offer a guide, the actual direction of the metal will likely be dictated by upcoming inflation reports and bond market movements. The next important update for market participants will be how prices react to these identified support levels in the coming trading sessions.