Precious metals lose ground in September amid dollar strength and rate hike fears

Precious metals faced a challenging September, with both gold and silver posting negative returns. The strengthening of the US Dollar and anticipation of a US interest rate hike weighed heavily on investor sentiment. Rising crude oil prices also failed to provide any support. As a result, Comex gold dropped 6.8% to close at $4,189.1 per ounce, while Comex silver saw an even steeper decline of 9.6%, settling at $60.75 per ounce.

The domestic market mirrored these global trends. MCX gold fell 4.1% to ₹1,149,092 per 10 grams, and MCX silver declined by 6.8% to ₹2,23,740 per kilogram. The weakening of the Indian Rupee against the US Dollar somewhat softened the impact of these losses in the domestic market.

Comex gold failed to hold its support zone of $4,200-$4,220, leading to a range-bound outlook with volatile price action expected between $3,900 and $4,550. A definitive trend will only emerge if the price breaks out above $4,560 or below $3,900. Similarly, Comex silver dropped below its support level of $62.5, with prices likely to oscillate between $54 and $69 in the near term.

Domestic prices also reflected this weaker sentiment. MCX gold breached its support level of ₹1,48,000, with prices now expected to fluctuate between ₹1,41,000 and ₹1,59,000. MCX silver fell below ₹2,25,000, with a range-bound outlook between ₹2,15,000 and ₹2,48,000 anticipated. The previously positive short-term outlook for both metals has been invalidated, and range-bound trading is expected until key levels are breached.