Gold prices today fall sharply from nine-month highs, silver rates drop

Gold prices today fell from nine-month highs in Indian markets in tandem with softer global rates amid a steady dollar. On MCX, gold futures fell 0.45% to ₹54,745 per 10 gram while silver futures dropped 0.55% to ₹69,427 per kg. Gold has risen sharply from ₹49,000 levels in end-September on expectations that the Federal Reserve would slow its pace of interest rate hikes, increasing the appeal of the non-yielding asset.

“Gold prices took weakness after a strong rally witnessed where prices crossed ₹55,200 on back of Comex gold crossing above $1830 but failed to close above $1820 and ₹55000 in MCX. This is the third instance where gold prices have been failing to close above 55000 since March 2020. Hence, it can be fairly said as long as ₹55,000 keeps acting as resistance on closing basis gold prices range can be seen between ₹53500- ₹55000,” said Jateen Trivedi, VP Research Analyst at LKP Securities.

In global markets, spot gold fell 0.5% to $1,804.48 per ounce while spot silver fell 0.6% to $23.89 per ounce.

The dollar index was steady and benchmark 10-year yields held close to their highest levels in more than a month. “Commodities trade lower amid limited global risk appetite as Chinese reopening revives inflation concerns,” Kotak Securities said in a note. China this week scrapped its COVID-19 quarantine rule for inbound travellers and said it will resume issuing passports for tourism in another big step away from anti-virus controls.

Traders now await the U.S. pending home sales report due later in the day, and Thursday's initial jobless claims.

“2022 has definitely given a boost in market participants confidence with respect to gold and silver. Along with Russia-Ukraine tensions, inflationary concern and Covid scare in China, market participants will also carry the baggage regarding slower global growth into the next year. Going ahead, market participants will keenly focus on the monetary policy stance from major central bankers. A move in Dollar Index and Yields will also be watched by the market. And also apart from safe haven bets, advancement in green technology and increase in industrial demand could continue to support silver prices,” Motial Oswal said in a note.

“Since the start of 2022, our view has been more in the favour of silver outperforming gold. We had given medium target of Rs. 53,000 for Gold and Rs. 64,500 for Silver which was achieved recently. Now, we do see some signs of exhaustion in both metals, however these dips could be used as buying opportunity for any medium to long term investor for the target of Rs. 58,000 in gold and Rs. 73,000 followed by 82,000 in silver,” the brokerage added.