Whalesbook
This dramatic downturn on MCX is primarily attributed to a confluence of factors dominating global financial markets. Profit-taking after a stellar run in precious metals has led to an immediate sell-off. The renewed strength in the US dollar has further pressured gold and silver, making them more expensive for holders of other currencies. Easing geopolitical tensions, particularly the anticipated US-Iran nuclear talks in Oman, has diminished the safe-haven appeal of precious metals. Adding to the pressure, the CME Group has increased margin requirements on Gold futures from 8% to 9% and on Silver from 15% to 18% effective Friday. This move forces traders to deposit more capital or liquidate positions, exacerbating the decline. The sell-off intensified last Friday following reports of US President Donald Trump nominating Kevin Warsh as the next Federal Reserve chief. Analysts at Kedia Stocks & Commodities noted that Warsh's nomination and recent hawkish comments from Fed officials have dampened expectations for further US interest rate cuts, a typical driver for gold's appeal. Despite the current volatility, some analysts remain cautiously optimistic. Geojit expects Gold prices to remain volatile but maintains a broader bullish outlook.
Support Levels and Forecasts
According to Geojit, MCX Gold faces support at ₹1,47,200 - ₹1,42,700, with MCX Silver support seen between ₹2,30,177 - ₹2,02,600. Analysts at UBS anticipate Gold prices to consolidate between $4,500 and $4,800 per ounce in the coming days due to margin call volatility. However, they believe gold will rally towards their mid-year forecast of $6,200 per ounce and continue to serve as an attractive hedge. Platinum prices have also slumped by 36% in the last six trading sessions, falling from a high of $2,818.06 to $1,808.65.