Gold prices can fall another 10% from here on; check key support levels

The MCX Gold December futures seem headed towards the 100-WMA (Weekly Moving Average) which stands at Rs 54,150 level; below which the next target shall be the 200-WMA.

Gold, which in general, is termed as a safer investment asset class in times of market uncertainty has witnessed an unusual sell-off in recent days despite fears of slowdown in world economies.

Is the recent sell-off a good time to invest in Gold and Silver? Or should you wait for a further dip. Here's what the charts suggest.

MCX Gold December futures

Bias: Negative

Current Price: Rs 56,700

Support: Rs 55,150

Resistance: Rs 57,400; Rs 57,700

Downside Targets: Rs 54,150; Rs 51,000

The MCX Gold December futures have tumbled over 5.5 per cent in the last eight trading sessions. On Tuesday, so far, MCX Gold December futures dip a low of Rs 56,565, and were seen quoting around Rs 56,700 level, down Rs 900 or 1.6 per cent.

The bias on the daily chart is extremely bearish, and is likely to favour the bears as long as Gold prices trade below Rs 57,400 level.

The price-to-moving averages action too is unfavourable, as Gold futures are seen trading below all the key moving averages on the daily time-frame. In fact, the 20-DMA (Daily Moving Average) now seems on course to fall below the 200-DMA which stands at Rs 58,800. This is likely to keep the sentiment tepid in the short- to medium-term.

Further, the weekly chart too suggests that the bias is likely to remain negative as long as the MCX Gold futures trade below Rs 57,700 level. On the downside, Gold prices seem headed towards the 100-WMA (Weekly Moving Average) which stands at Rs 54,150 level. Below which a sharper correction towards the 200-WMA could mean a fall to Rs 51,000 odd levels. Thus indicating a possibility of another 4.5 per cent to 10 per cent decline in Gold prices from present levels.

In the interim, Gold futures could seek support around Rs 55,150 level, wherein stands the 20-MMA (Monthly Moving Average).

MCX Silver December futures

Bias: Negative

Current Price: Rs 66,800

Support: Rs 65,700; Rs 65,400

Resistance: Rs 70,100

At the lowest point of the day on Tuesday Rs 65,666, the MCX Silver futures were down 6 per cent in intra-day deals, and down a whopping 10.5 per cent in just six trading sessions when compared to the close at Rs 73,337 on September 22.

In the process, Silver futures are seen trading below the 200-DMA for first time since November 18, 2022. The 200-DMA stands at Rs 70,900.

Further, Silver futures are also seen trading sharply below the lower-end of the Bollinger Bands on the daily chart, which stands at Rs 68,790. The price-to-moving averages action is also fairly negative, with the 20-DMA at Rs 71,700, quoting below the 50- and 100-DMA at Rs 72,270 and Rs 72,100 levels.

On the downside, the MCX Silver December futures seem to be seeking support around the 100-WMA placed at Rs 65,400 level, below which the next target will be Rs 62,400 - the 200-WMA.

However, for now, it’s crucial for Silver futures to hold the support at Rs 65,400, as it near-about coincides with the 20-MMA which stands at Rs 65,700. As long as this support range is held, Silver futures may attempt a pullback to Rs 74,000-odd levels.