Gold price jumps 1%, silver surges 2% on MCX; what is fueling the rally? Is it the right time to buy gold?

Gold price today: Rates of gold jumped by over 1 per cent, while those of silver surged by 2 per cent in morning deals on the MCX on Monday, November 10, buoyed by positive global cues and rising expectations of another rate cut by the US Federal Reserve next month. MCX Gold December futures traded 1.12 per cent higher at ₹1,22,426 per 10 grams around 9:40 am. MCX Silver December contracts were 1.93 per cent up at ₹1,50,579 per kg at that time.

What is driving gold and silver prices higher?

Gold prices saw significant corrections after hitting record highs in October. However, the fresh momentum in the yellow metal is being driven by mounting concerns over the health of the US economy and rising expectations of another US Fed rate cut in December.

Latest data show significant weakness in the US jobs market and consumer sentiment as the federal government shutdown stretched into its 40th day Sunday. It is the longest ever US government shutdown.

"The US government shutdown has entered a record duration, increasing concerns about the broader US economic outlook, prompting renewed safe-haven demand. The dollar index softened as well, lending additional support to bullion prices," said Rahul Kalantri, VP of commodities at Mehta Equities.

As Reuters reported, citing data, losses in the government and retail sectors resulted in job losses in October, while cost-cutting and artificial intelligence (AI) adoption by businesses led to a surge in announced layoffs. Moreover, US consumer sentiment weakened to its lowest level in nearly three-and-a-half years in early November amid growing concerns over the economic impact of the US government shutdown.

Job market trends indicate the US Fed may cut rates at its December policy meeting. According to the CME FedWatch Tool, traders see a 67 per cent chance of a Fed rate cut in December.

"Gold rose more than 1 per cent amid mounting concerns over the US economy. On Friday, the University of Michigan’s consumer sentiment index fell to its lowest level in nearly three and a half years as the US government shutdown extended to the longest in history. Moreover, the yellow metal also benefited from a pullback in the dollar," Jigar Trivedi, Senior Research Analyst at Reliance Securities, pointed out.

Trivedi said MCX Gold December may appreciate to ₹1,22,700 per 10 grams, with support at ₹1,22,000.

Gold and silver: What should investors do?

Gold and silver prices may remain volatile in the near term. Experts suggest buying them on dips.

"We expect gold and silver prices to remain volatile this week amid volatility in the dollar index, volatility in the global financial markets, ahead of the US inflation data and uncertainty on the ending US shutdown," said Manoj Kumar Jain of Prithvifinmart Commodity Research.

"We suggest buying gold and silver on dips until it is holding its support levels of ₹1,17,700 and ₹1,44,000, respectively, on a daily closing basis," said Jain.

According to Jain, gold is expected to trade in the range of $3,870-$ 4,140 per troy ounce, and silver is anticipated to trade in the range of $45.50-$50.50 per troy ounce this week.

Jain said gold has support at $3,984 and $3,960, while resistance is at $4,028 and $4,054 per troy ounce, and silver has support at $47.70 and $47.40, while resistance is at $48.40 and $48.84 per troy ounce in today’s session.

MCX Gold has support at ₹1,20,550 and ₹1,20,100, and resistance is at ₹1,21,660 and ₹1,22,200, while silver has support at ₹1,46,800 and ₹1,45,500 and resistance is at ₹1,49,200 and ₹1,50,150, Jain said.

According to Kalantri, gold has support at $3,955 and $3,920, while resistance is at $4,040 and $4,065. Silver has support at $47.80 and $47.45, while resistance is at $48.55 and $48.85.

In INR, gold has support at ₹1,20,450 and ₹1,19,880 while resistance is at ₹1,21,790 and ₹1,22,400. Silver has support at ₹1,46,850 and ₹1,45,900 while resistance is at ₹1,48,840 and ₹1,49,780, Kalantri said.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.