Gold, silver prices drop on dollar's rise; Fed's rate cut signals cap losses; experts highlight key MCX levels to watch

Gold price today: Gold rates traded lower in the domestic futures market in early deals on Monday, August 25, on the dollar's rise against its peers and tepid spot market demand. However, signals of a potential rate cut by the US Federal Reserve in September limited losses for the yellow metal.

MCX Gold October 3 contracts were down 0.14 per cent at ₹1,00,242 per 10 grams around 9:10 AM. MCX Silver September 5 contracts were down 0.27 per cent at ₹1,15,920 per kg at that time.

The dollar index rose about 0.30 per cent, weighing on gold prices. Since gold is traded in the US dollar, a stronger US currency makes it expensive in other currencies, causing demand fatigue.

Meanwhile, US Federal Reserve Chair Jerome Powell gave subtle hints on August 22 that rate cuts may occur in September.

In his Jackson Hole speech, Powell said: "With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."

According to Reuters, the CME FedWatch Tool indicates markets are now expecting an 87 per cent chance of a 25 bps rate cut at the September 17 policy meeting and an overall 48 basis points of reductions by the end of this year.

Powell's rate cut signals boosted investors' risk appetite. The Nasdaq and S&P 50 jumped almost 2 per cent, and the Indian stock market benchmark Nifty 50 opened 0.30 per cent up on Monday.

The focus is now on the US Q2 GDP preliminary prints on Thursday and personal consumption prices (PCE) data on Friday. India's Q1 GDP prints are also due on Friday.

According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold has support at $3,400-3,370, while resistance is at $3,440-3,454 per troy ounce, and silver has support at $38.70-38.44, while resistance is at $39.35-39.70 per troy ounce in today’s session.

MCX Gold has support at ₹99,920-99,550 and resistance at ₹1,00,700-1,01,100 while silver has support at ₹1,15,500-1,14,400 and resistance at ₹1,17,000-1,18,000, said Jain.

Jain suggests buying gold on dips around ₹99,900 with a stop loss of ₹99,380 for the target of ₹1,01,100 and buying silver on dips around ₹1,15,200 with a stop loss of ₹1,14,000 for the target of ₹1,17,400.

Rahul Kalantri, VP of commodities at Mehta Equities, said gold has support at $3,345-3,325 and resistance at $3,380-3,400. Silver has support at $38.55-38.30 and resistance at $39.05-39.25.

In INR, Kalantri said gold has support at ₹99,680-99,450 while resistance is at ₹1,00,650-1,00,850. Silver has support at ₹1,15,350-1,14,550 while resistance at ₹1,16,750, 1,17,250.

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stories by Nishant Kumar

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.

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