Precious metals faced a challenging week, primarily due to a surging US dollar. The dollar index reached a 19-month high of 103.44 before settling at 103.41. Gold ($3,884.70 per ounce) and silver ($48.70 per ounce) dropped 4.6% and 5.8% respectively. Despite the downturn, both metals have key support levels ahead, which could trigger a short-term recovery, though further declines are possible before a rebound.
In the domestic market, gold futures (₹1,36,705 per 10 gram) fell 3.8%, while silver futures (₹1,76,309 per kg) declined 4.6%. MCX-Gold (Dec) futures breached support at ₹1,38,000, hitting a fresh low of ₹1,35,530 before recovering to close at ₹1,36,705. The downtrend remains strong, with no signs of reversal. Gold in dollar terms has more room to decline before reaching key support levels, suggesting further drops in domestic gold futures, potentially to ₹1,35,000 or ₹1,33,500.
On the other hand, a recovery from current levels will face resistance at ₹1,41,000 and ₹1,43,600. Only a decisive breakout above ₹1,43,600 can turn the outlook positive. Overall, gold futures are expected to extend declines before rebounding from the ₹1,33,500-1,35,000 support zone, with any recovery likely to face selling pressure at resistance levels.
MCX-Silver (Dec) futures declined from resistance at ₹1,90,000 but stayed above the previous low of ₹1,75,251. The trend remains weak, with a high likelihood of breaching support at ₹1,75,000, which could drag prices to ₹1,67,700-1,70,000. Further declines in international silver prices increase the likelihood of more losses before a recovery. A bullish outlook requires silver futures to surpass ₹2,00,000, otherwise, bears will retain control.