Gold and silver prices experienced a pullback on Wednesday as the US dollar regained strength, prompting investors to take profits following recent gains. The precious metals market saw a consolidation after gold reached a near three-week high.

Price Movements

Market Dynamics

The decline in gold prices can be attributed to several factors:

1. Dollar Rebound: The US dollar index rose 0.1%, ending a five-session losing streak. This strengthening made gold less attractive for holders of other currencies.

2. Profit-Taking: Investors capitalized on the recent rally, selling off positions after gold reached a near three-week high.

3. Fed Rate Cut Expectations: Despite the pullback, gold remained supported by expectations of potential Federal Reserve rate cuts. Traders are pricing in a 68% probability of a 25-basis-point cut in December.

Technical Levels

• Gold:

  • Support: $4,000 per ounce
  • Resistance: $4,200 per ounce

• Silver:

  • Trading Range: $48 - $51 per ounce (international markets)

Market Outlook

While short-term corrections may continue, bullion remains underpinned by monetary easing expectations. Additionally, steady physical demand during India's wedding season provides further support for gold prices.

Investors and traders should keep a close eye on US dollar movements and any shifts in Federal Reserve policy expectations, as these factors are likely to influence precious metal prices in the near term.

Gold and silver prices have experienced a significant upturn following a two-week decline, driven by global economic concerns and a weakening US dollar.

Price Movements

Gold prices surged by Rs 4,000 per 10 grams, rising from Rs 1.18 lakh to Rs 1.22 lakh on Monday. Similarly, silver saw an increase of Rs 9,000 per kg, jumping from Rs 1.41 lakh to Rs 1.50 lakh per kg.

Market Dynamics

• Customer demand has decreased post-festive season, with investment demand falling 35% since Dhanteras.
• Current purchases are primarily focused on the upcoming wedding season from mid-November to March.
• The price surge is attributed to the dollar index failing to sustain above 100 and renewed buying interest in precious metals.

International Markets

• On Comex, gold rallied from $4,000 support to $4,085.
• MCX gold prices increased by Rs 2,000 to Rs 1,23,100.
• Silver outperformed with Comex prices rebounding from $48.50 to near $50.
• MCX silver rose from Rs 1,48,000 to Rs 1,52,300 per kg.

Driving Factors

1. Weakened US dollar making dollar-denominated bullion more attractive.
2. Concerns over a potential US government shutdown.
3. Safe-haven demand amid global economic uncertainties.
4. Recent US economic data indicating job losses in government and retail sectors.
5. Increased holdings in gold-backed ETFs, with SPDR Gold Trust reporting a rise to 1,042.06 metric tons.

Technical Analysis

Market Outlook

Analysts anticipate near-term consolidation in precious metal prices, with continued support from safe-haven buying. The market remains sensitive to global economic indicators and potential shifts in monetary policy, particularly regarding the Federal Reserve's stance on interest rates.

Investors and traders are advised to monitor upcoming economic data releases and central bank communications, as these could significantly impact gold and silver price movements in the coming weeks.