Gold, silver rebound after sharp losses as crude oil prices soften

Gold and silver prices recovered on Monday, November 2, after a sharp fall last week. Experts attributed the rebound to easing inflation concerns as crude oil prices declined.

 

In the global market, gold futures on Comex were trading near $4,000 per ounce, while silver was trading near $50 per ounce. In the domestic market, gold futures on the Multi Commodity Exchange (MCX) were trading near ₹1,38,700 per 10 gram at the time of writing, while silver futures were trading near ₹1,81,100 per kg.

Gold prices rise

Gold futures opened higher. On the MCX, the benchmark December gold contract opened ₹518 higher at ₹1,39,003 per 10 gram. The previous close was ₹1,38,485.

 

 

At the time of writing, the contract was trading ₹248 higher at ₹1,38,733.

 

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

Silver also gains

Silver futures also opened higher. On the MCX, the benchmark December silver contract opened ₹1,962 higher at ₹1,81,094 per kg. The previous close was ₹1,79,132.

 

At the time of writing, the contract was trading ₹1,993 higher at ₹1,81,125.

 

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

Gold, silver rise in global market

Gold and silver prices were trading higher in the international market.

 

On Comex, gold opened at $3,890 per ounce. The previous closing price was $3,898.90. At the time of writing, it was trading $116.20 higher at $4,015.10 per ounce.

 

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

 

Comex silver futures opened at $49.20 per ounce. The previous closing price was $49.27. At the time of writing, silver was trading $0.78 higher at $50.05 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 fresh selling pressure. Open interest rose 4.9 per cent to 16,368 contracts, while prices fell by ₹4,111, indicating the creation of fresh short positions.

 

Gold has support at ₹1,36,960. A fall below this level could take prices towards ₹1,35,440.

 

On the upside, resistance is seen at ₹1,41,290. If gold sustains above this level, prices could rise towards ₹1,44,090.

 

Silver was also witnessing fresh selling pressure from a technical perspective. Open interest rose 1.36 per cent to 18,105 contracts, while prices declined by ₹10,321, indicating the creation of fresh short positions.

 

Silver has support at ₹1,75,880. A fall below this level could take prices towards ₹1,72,620.

 

On the upside, resistance is seen at ₹1,85,330. If silver sustains above this level, prices could rise towards ₹1,91,530.

Why have gold and silver recovered?

Vikram Subburaj, chief executive officer of Giottus.com, said gold and silver prices were recovering in Asian trade on November 2 as falling crude oil prices eased inflation concerns and provided support to precious metals.

 

Gold had fallen 3.7 per cent on Friday, while silver declined nearly 6 per cent. Investors were also selling gold and silver to offset losses in technology shares, helping explain why bullion had fallen sharply despite typically attracting safe-haven demand during periods of uncertainty, he said.

 

The sustainability of the recovery would depend partly on whether expectations of tighter monetary policy recede.

 

US interest-rate futures were indicating a 72 per cent probability of a 25-basis-point increase by the Federal Reserve in December. Higher bond yields would increase the opportunity cost of holding non-interest-bearing precious metals such as gold and silver.

 

The US employment report due on November 6 will be the next key trigger for the market, Subburaj said. 

MCX, Comex prices

 

Note: MCX gold futures prices are in rupees per 10 gram, while MCX silver futures prices are in rupees per kg. Comex gold and silver futures prices are in dollars per ounce. Last traded prices are as of the time of writing.