Gold and silver prices have been seeing wild swings over the past two trading sessions, as the ongoing West Asia conflict continues to weigh on investor sentiment.
In international markets, spot gold fell below the $4,500/oz for the first time since February 2, falling $1,100/oz from its January record highs of $5,600/oz, while spot silver was quoted near the $67/oz, declining by more than 6% in the same session.
On MCX Gold’s futures for April delivery ended flat at Rs 1,44,825 per 10 grams, while the May delivery contract for silver ended in red at Rs 2,27,470 per kg, down nearly 2% from its previous close.
Gold, silver: Key levels to watch
Steep declines were posted by precious metals in Thursday’s trade as well.
Market experts said that the decline came due to the surge in oil prices following the prolonged West Asia conflict. High oil and energy prices have ignited inflationary concerns, pushing the dollar index towards its monthly high levels.
“Gold and silver are currently behaving less like safe havens and more like casualties of a tightening dollar liquidity cycle. The sharp surge in oil and gas prices has triggered a spike in global dollar demand, as energy-importing economies scramble for funding. This has strengthened the dollar and pushed up funding costs, leading to liquidation pressure in precious metals,” said Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.
With gold slipping decisively below the key $5,000 per troy ounce level and silver hovering near $70, markets are now closely watching critical technical levels for further direction.
MCX Gold rate, MCX Silver: Support and resistance
Banerjee says gold has strong support near $4,500 on the spot market and around Rs 1,40,000 on MCX, while resistance is seen at $4,850–$4,860, translating to roughly Rs 1,50,000- 1,54,000 on MCX.
For silver, the analyst says the immediate support lies in the $60–$70 zone on the spot market, with MCX supports placed at Rs 2,25,000, followed by Rs 2,10,000 and Rs 2,00,000. On the upside, resistance for silver is seen near $77.5–$78 on spot and around Rs 2,50,000 on MCX.
He says that elevated oil prices continue to cap gains in metals, adding that oil is driving the liquidity cycle and metals are reacting to it.
“…but any stabilization—especially via a smoother resolution around Hormuz—can quickly reverse this pressure,” the analyst added.
Gold likely to remain volatile
According to Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, gold is likely to remain highly volatile despite the recent uptick.
“Overall, gold is likely to remain weak with heightened volatility, with a near-term trading range seen between Rs 1,40,000–Rs 1,47,000,” Trivedi said, adding that the broader sentiment continues to remain weak due to unfavorable key fundamentals.
Move back to $4,800 could ease upside for gold
“The war is providing some haven support, but that’s secondary. The prospects of the Fed staying on hold into 2027 are creating a headwind for gold,” Reuters quoted Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, as saying.
He added that a move back above $4,800 would ease some of the downside pressure and suggest potential for a move toward $5,000. “I don’t see a breakout from the current range anytime soon, but when it does happen, I think the move will ultimately be to the upside,” Grant told Reuters.
Conclusion
With no signs of de-escalation in the West Asia conflict, oil prices and dollar strength continue to cap gains for gold and silver. Choice Broking, in its weekly gold and silver forecast, expects a moderately bearish outlook for precious metals in the upcoming week. Investors will continue to gauge key US economic data and geopolitical developments for further cues on precious metal prices.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a qualified professional before making investment decisions.