Gold, silver open weak after Fed keeps rates unchanged, prices volatile

Comex gold traded near $4,050 an ounce and silver at $53.30, while MCX gold hovered around ₹1,43,600 per 10 grams and silver near ₹1,93,250 per kg on Thursday

Gold and silver prices were volatile after the US Federal Reserve kept interest rates unchanged. Two Fed officials dissented in favour of a 25-basis-point rate increase, strengthening expectations of a possible rate hike in December.

 

Gold and silver opened higher in the global market before giving up gains, while the domestic market started on a weak note.

 

On Thursday, October 29, gold futures on Comex were trading near $4,050 per ounce, while silver was trading near $53.30 per ounce. In the domestic market, gold futures on the Multi Commodity Exchange (MCX) were trading near ₹1,43,600 per 10 gram at the time of writing, while silver futures were trading near ₹1,93,250 per kg.

Gold prices fall

Gold futures opened lower. On the MCX, the benchmark December gold contract opened ₹37 lower at ₹1,43,668 per 10 gram. The previous close was ₹1,43,705.

 

At the time of writing, the contract was trading ₹108 lower at ₹1,43,597.

 

Gold futures had touched a high of ₹1,80,779 per 10 gram earlier this year.

Silver also slips

Silver futures also opened lower. On the MCX, the benchmark December silver contract opened ₹1,682 lower at ₹1,92,643 per kg. The previous close was ₹1,94,325.

 

At the time of writing, the contract was trading ₹1,075 lower at ₹1,93,250.

 

Silver futures had touched a high of ₹4,20,048 per kg earlier this year.

Gold, silver weaken in global market

Gold and silver futures were trading lower in the international market after opening higher.

 

On Comex, gold opened at $4,081.40 per ounce. The previous closing price was $4,051.60. At the time of writing, it was trading $1.80 lower at $4,049.80 per ounce.

 

Gold prices had touched a high of $5,586.20 per ounce earlier this year.

 

Comex silver futures opened at $54.05 per ounce. The previous closing price was $53.66. At the time of writing, it was trading $0.36 lower at $53.30 per ounce.

 

Silver prices had touched a high of $121.79 per ounce earlier this year.

Why are gold and silver under pressure?

Vikram Subburaj, chief executive officer of Giottus.com, said gold and silver were under pressure on Thursday because of a stronger US dollar and expectations that interest rates could remain elevated for longer.

 

Pressure on bullion increased after the US Federal Reserve kept its policy rate unchanged at 3.75-4.00 per cent, he said.

Levels to watch

According to Ajay Kedia, director, Kedia Advisory, gold was technically witnessing long unwinding. Open interest declined 0.2 per cent to 15,591 contracts as prices fell by ₹433.

 

Gold has support at ₹1,43,240. A break below this level could take prices towards ₹1,42,770.

 

Resistance is seen at ₹1,44,260. A move above this level could take gold towards ₹1,44,810.

 

Silver was technically witnessing fresh selling pressure. Open interest rose 0.36 per cent to 16,598 contracts as prices declined by ₹2,392, indicating the creation of fresh short positions.

 

The technical data placed support at ₹1,93,370, followed by ₹1,92,410. However, the current silver price quoted in the report, at ₹1,93,250, is already below the first support level.

 

Resistance is seen at ₹1,95,920. If silver sustains above this level, prices could rise towards ₹1,97,510.