Gold, silver turn cheaper on Dhanteras amid profit-booking, firm dollar

Gold and silver prices traded lower on Friday, November 6, as a firmer dollar and profit-booking at higher levels weighed on the precious metals.

 

Gold and silver had risen sharply on Thursday after the Democratic Party’s victory in the US midterm elections and Donald Trump’s defeat raised hopes of an end to the US-Iran conflict.

 

At the time of writing, gold futures on Comex were trading near $4,060 per ounce, while silver was trading near $51.70 per ounce. In the domestic market, gold futures on the Multi Commodity Exchange (MCX) were trading near ₹1,42,450 per 10 gram, while silver futures were trading near ₹1,84,600 per kg.

 

 

Gold prices fall

 

Gold futures opened lower. On the MCX, the benchmark December gold contract opened ₹1,934 lower at ₹1,42,161 per 10 gram. The previous close was ₹1,44,095.

 

At the time of writing, the contract was trading ₹1,674 lower at ₹1,42,421.

 

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 ₹1,641 lower at ₹1,85,499 per kg. The previous close was ₹1,87,140.

 

At the time of writing, the contract was trading ₹2,540 lower at ₹1,84,600.

 

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

 

Gold, silver weak in global market

 

Gold and silver were trading lower in the international market.

 

On Comex, gold opened at $4,098.50 per ounce. The previous closing price was $4,113.50. At the time of writing, it was trading $52.30 lower at $4,061.20 per ounce.

 

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

 

Comex silver futures opened at $51.72 per ounce. The previous closing price was $52.37. At the time of writing, it was trading $0.70 lower at $51.67 per ounce.

 

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

 

Levels to watch

 

According to Ajay Kedia, director, Kedia Advisory, gold was technically witnessing short covering. Open interest declined 2.35 per cent to 15,716 contracts, while prices rose by ₹861 during the period under consideration.

 

The technical data placed support at ₹1,42,930, followed by ₹1,41,760. However, the current price quoted in the report, at ₹1,42,421, is already below the first support level.

 

Resistance is seen at ₹1,45,690. If prices sustain above this level, gold could rise towards ₹1,47,280.

 

Silver was technically witnessing long unwinding. Open interest declined 2.58 per cent to 16,701 contracts, while prices fell by ₹595.

 

Silver has support at ₹1,84,230. A break below this level could take prices towards ₹1,81,330.

 

Resistance is seen at ₹1,90,500. If silver sustains above this level, the recovery could extend towards ₹1,93,850.

 

Why have gold and silver fallen?

 

Vikram Subburaj, chief executive officer of Giottus.com, said gold and silver prices declined in early trade on Friday, November 6, as the dollar strengthened marginally ahead of the release of US employment data.

 

Gold had risen more than 5 per cent in the international market earlier in the week, supported by a decline in US Treasury yields and a weaker dollar. However, that support weakened on Friday morning, he said.

 

Investors are now awaiting US employment data scheduled to be released on Friday evening.

 

Subburaj said stronger employment and wage-growth data could reinforce expectations of higher interest rates and put further pressure on gold. Weaker data, on the other hand, could provide an opportunity for gold prices to recover.