Gold and silver prices dropped sharply in the domestic futures market on Tuesday morning as hopes of a US Federal Reserve rate cut
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MUMBAI — Gold and silver prices dropped sharply in the domestic futures market on Tuesday morning as hopes of a US Federal Reserve rate cut in December faded and concerns over US tariffs eased.
This reduced the appeal of safe-haven assets like bullion. At early trade, MCX Gold December futures were trading 1.19 per cent lower at Rs 1,21,466 per 10 grams.
MCX Silver December contracts also declined 1.65 per cent to Rs 1,52,750 per kg.
"Gold has support at $4000-3965 while resistance at $4075-4110. Silver has support at $49.70-49.45 while resistance is at $50.75-51.10," market watchers said.
"In INR gold has support at Rs1,22,350-1,21,780 while resistance at Rs1,23,750-1,24,500. Silver has support at Rs1,53,850-1,52,100 while resistance at Rs1,56,540, 1,57,280," they added.
Internationally, gold prices slipped for the fourth straight session on Tuesday.
A stronger US dollar and weakening expectations of a rate cut next month continued to weigh on the metal.
The dollar index rose to 99.59, making gold more expensive for buyers using other currencies.
Gold, which is priced in US dollars, becomes costlier when the greenback strengthens, resulting in reduced demand.
The recent US government shutdown, which lasted a record 43 days, had delayed the release of important economic data, creating uncertainty about the condition of the world’s largest economy.
With the shutdown now over, attention has shifted to key data releases expected this week, including the September nonfarm payrolls report on Thursday.
These numbers will play a major role in shaping expectations around the US Federal Reserve’s next move on interest rates.
Meanwhile, Fed officials continue to send mixed signals on the future path of monetary policy, adding further uncertainty to the market.
With no major positive fundamental triggers in recent days, bulls remain hesitant—especially with both metals still trading at historically high levels.
"Traders now await a fresh round of US economic data later this week. Meanwhile, a firmer US Dollar Index and slightly higher 10-year Treasury yields added pressure to precious metals," analysts said.