Gold and Silver Futures: Market Update and Insights
On Friday, February futures contracts for gold at the Multi Commodity Exchange (MCX) opened slightly higher at Rs 78,311 per 10 grams, reflecting an increase of 0.27% or Rs 207. In parallel, March futures contracts for silver also saw a modest rise, opening at Rs 92,160 per kilogram, which is up by nearly 0.5% or Rs 449. This upward trend in precious metals comes amid a backdrop of fluctuating global economic indicators and investor sentiment.
January Performance Overview
As we analyze the performance of gold and silver in January, gold prices have surged by Rs 1,560 per 10 grams, showcasing a robust demand for the yellow metal. In contrast, silver has experienced a decline, dropping by Rs 4,930 per kilogram during the same period. This divergence in performance highlights the varying investor preferences and market dynamics affecting these two precious metals.
Domestic Market Trends
In the domestic market, MCX gold has extended its positive momentum for the third consecutive session, closing with the formation of a bullish candle on the daily chart. This bullish sentiment is indicative of growing investor confidence in gold as a safe-haven asset, particularly in times of economic uncertainty.
On Friday, gold prices remained stable during early Asian hours, positioning themselves for what could be the strongest week since mid-November. Investors are keenly awaiting the release of US jobs data, which will provide insights into how aggressively the Federal Reserve might consider cutting interest rates this year. Such decisions are crucial as they directly impact the attractiveness of non-yielding assets like gold.
International Market Dynamics
In the international arena, spot gold prices were unchanged at $2,670.16 per ounce as of 0044 GMT, having gained more than 1% so far this week. Meanwhile, US gold futures edged up by 0.1% to $2,694.50. The recent strength in bullion prices can be attributed to safe-haven demand, particularly as investors assess the potential economic impacts of US President-elect Donald Trump’s policies, which are expected to influence inflation rates.
The US Dollar Index (DXY) hovered near the 109.18 mark, remaining relatively flat. This stability in the dollar is significant, as fluctuations in the dollar’s value often correlate with changes in gold prices. Bullion is traditionally viewed as a hedge against inflation; however, higher interest rates can diminish the appeal of holding gold, which does not yield interest.
Technical Analysis and Support Levels
According to analysts at Way2Wealth, the technical outlook for gold indicates support levels at Rs 77,572-77,838 and resistance levels at Rs 78,312-78,520. For silver, support is identified at Rs 90,285-90,998, with resistance at Rs 92,362-93,013. Traders are advised to implement strict stop-losses, as market volatility is expected to remain elevated due to ongoing geopolitical tensions.
Physical Gold Prices Across Major Cities
The physical gold market also reflects the current trends. As of today, the prices for standard gold (22 carat) and pure gold (24 carat) in various cities are as follows:
Delhi: 22 carat at Rs 57,328/8 grams; 24 carat at Rs 61,112/8 grams.
Mumbai: 22 carat at Rs 57,624/8 grams; 24 carat at Rs 61,496/8 grams.
Chennai: 22 carat at Rs 56,800/8 grams; 24 carat at Rs 60,576/8 grams.
Hyderabad: 22 carat at Rs 57,208/8 grams; 24 carat at Rs 60,960/8 grams.
Conclusion
The current trends in gold and silver futures at MCX reflect a complex interplay of domestic and international factors. As investors navigate through economic uncertainties and geopolitical tensions, gold continues to be a favored asset for hedging against inflation. With the upcoming US jobs data poised to influence market sentiment, traders and investors alike will be closely monitoring these developments to make informed decisions in the precious metals market.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of The Economic Times.)
English 