Gold and silver prices were volatile in morning trade on the MCX on Friday, 18 September, as a decline in crude oil prices and a stable US dollar supported prices but lingering concerns over the US-Iran war kept investors cautious.
MCX gold October futures were 0.08% down at ₹1,52,861 per 10 grams, while MCX silver December futures were 0.49% up at ₹2,39,380 per kg around 9:10 AM.
International crude oil benchmark Brent Crude declined by 1% to trade below $104 per barrel, while the US dollar was flat, but set to end the week with a gain of over 1%, weighing on the yellow metal.
US gold futures for December delivery cooled by 0.10% to $4,380.95 per troy ounce.
After the US Federal Reserve lifted interest rates by 25 basis points on 16 September, the major trigger for gold prices remain upcoming macro data and the US-Iran conflict.
According to Axios, US President on Thursday said that he could take a major decision about the Iran war over whether to restart massive attacks in an effort to bring the conflict to a close.
“I have a big decision coming up. Do I want to go in and annihilate them [the Iranian regime] or do I not? It’s a big decision. Anything could happen with me.”
While geopolitical uncertainties are considered positive for gold prices, the Middle east conflict is a negative for the yellow metal due to the crude oil angle. Unresolved conflict between the US and Iran can keep oil prices higher for longer, stoking inflation, and prompting the central banks to hike rates further from the current levels.
In September, the European Central Bank (ECB) raised its key deposit rate by 25 basis points, the raised benchmark interest rates by 25 bps, and the Bank of Japan (BoJ) raised interest rates to a 31-year high of 1.25%. The Bank of England kept interest rates on hold.
Gold prices tend to fall in time of monetary tightening as it is a non-yielding asset.
Gold and silver prices: Key levels to watch
Manoj Kumar Jain of Prithvifinmart Commodity Research said MCX gold has support at ₹1,51,650 and ₹1,50,500 and resistance at ₹1,53,800 and ₹1,55,000, while silver has support at ₹2,36,000 and ₹2,33,300, and resistance at ₹2,40,400 and ₹2,43,000.
“We suggest traders for booking profits in gold and silver long positions on every price rise,” said Jain.
Ravi Singh, Chief Research Officer at Master Capital Services, said MCX gold is witnessing some recovery after holding the crucial ₹1,49,600 support, but the broader setup remains cautious as prices continue to trade below the 21-day EMA near ₹1,53,200, while the 55-day EMA is around ₹1,51,900.
“The immediate resistance remains ₹1,57,081, and a sustained breakout above this level could strengthen momentum towards ₹1,60,000. On the downside, a decisive break below ₹1,49,600 could reopen the path towards ₹1,46,000. Until the price establishes itself above the key EMAs, the sell-on-rise strategy remains preferred,” said Singh.
According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, MCX gold October futures may appreciate to ₹1,53,400 as prices are likely to rebound in the global markets.
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