Gold rates slip on dollar's rise; silver jumps 4% on MCX on strong spot demand; experts highlight key levels to watch

The rates of gold jumped by more than half a per cent, while silver surged by 4% in morning trade on the MCX on Wednesday, December 17, supported by positive global cues and expectations of further rate cuts by the US Federal Reserve after data showed US unemployment rates rose in November. MCX gold February contracts climbed by 0.55% to ₹1,35,150 per 10 grams level, slightly below its record high of ₹1,35,346 hit in the previous session. MCX silver March futures surged 4% to their record high of ₹2,05,665 per kg.

However, the dollar's rise against its peers triggered profit booking in precious metals. The dollar index climbed by 0.20%, weighing on non-yielding gold. Around 9:20 am, MCX gold (February contracts) was 0.21% down at ₹1,34,129 per 10 grams, while MCX silver was 3.38% up at ₹2,04,445 per kg.

Gold prices are volatile as hopes of another Federal Reserve rate cut in January act as a catalyst, while signs suggesting a possible end to the Russia–Ukraine war weigh on sentiment.

The U.S. jobs report data showed an increase in unemployment in November. As Reuters reported, the U.S. unemployment rate at 4.6% in November exceeded a Reuters survey of economists' estimate of 4.4%.

Markets are expecting two rate cuts of 25 basis points each in 2026. Gold prices tend to rise in a low-interest-rate regime. The US Federal Open Market Committee's (FOMC) next meeting is scheduled for January 27-28.

"The latest jobs data pressure the Fed to cut rates again when they next meet in January. Hiring momentum has weakened in recent months, and the Fed will want to arrest this deterioration and help labour demand regain traction," said Bill Adams, Chief Economist for Comerica Bank.

Comerica forecasts the Fed to cut the federal funds target by a quarter of a per cent at their next decision on January 28. The Fed is forecast to cut rates a cumulative three-quarters of a per cent in 2026," said Adams.

On the other hand, encouraging signs are emerging on the geopolitical front, as an end to the Russia-Ukraine war looks near. Media reports indicate that a potential Russia-Ukraine peace deal is closer than ever.

Ukrainian President Volodymyr Zelenskyy has reportedly said that a proposal to end the conflict with Russia, currently being negotiated with US officials, could be finalised within a few days. The proposal would then be presented to Moscow by US officials for further discussions next weekend.

Gold and silver: Key levels to watch

According to Manoj Kumar Jain of Prithvifinmart Commodity Research, gold has support at $4,300 and $4,274, while resistance is at $4,355 and $4,400 per troy ounce. Silver has support at $62.60 and $61.80, while resistance is at $64.20 and $65.50 per troy ounce in today’s session.

MCX gold has support at ₹1,33,600 and ₹1,32,800, and resistance is at ₹1,35,000 and ₹1,35,500, while silver has support at ₹1,96,000 and ₹1,94,400 and resistance is at ₹1,99,000 and ₹2,00,500, said Jain.

Jain suggests buying gold on dips around ₹1,33,850 with a stop loss of ₹1,33,200 for the target of ₹1,35,100 and waiting for some corrective dips in silver for initiating fresh long positions.

According to Jigar Trivedi, Senior Research Analyst at Reliance Securities, MCX gold February futures may rally further to ₹1,35,500 per 10 grams amid a positive undertone in the world markets.

For silver, Trivedi said strong fundamental demand and supply shortages, along with controlled corrections and aggressive buying on dips, suggest that the trend remains intact as long as supports continue to hold.

Rahul Kalantri, VP of commodities at Mehta Equities, finds support for gold at $4,275 and $4,245, while resistance is at $4,355 and $4,385. Silver has support at $63.20 and $62.75 while resistance is at $64.20 and $64.75, Kalantri said.

In INR, Kalantri said gold has support at ₹1,33,850 and ₹1,33,110 while resistance is at ₹1,34,950 and ₹1,35,670. Silver has support at ₹1,96,450 and ₹1,95,280, while resistance is at ₹1,99,810 and ₹2,01,270.

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