Gold, silver prices climb on MCX due to value buying as dollar eases; experts highlight key levels to watch

Gold and silver prices climbed in early trade on the MCX on Monday, 20 July, largely due to value buying after the US dollar eased slightly, even as crude oil prices remained elevated, fuelling expectations of rate hikes by the US Federal Reserve.

MCX gold August futures traded 0.30% higher at ₹1,41,322 per 10 grams, while MCX silver September contracts were 1.38% up at ₹2,19,400 per kg around 9:15 am.

Gold prices in the US, however, dropped as escalating Middle East tensions drove Brent crude above $90 per barrel, bolstering inflation concerns and expectations of U.S. Federal Reserve rate hikes this year.

The US-Iran war continues. Media reports suggested the US launched a ninth consecutive night of airstrikes on Iran early Monday.

Meanwhile, US Secretary of State Marco Rubio on Sunday (local time) said that Washington remains open to a diplomatic solution with Tehran.

Meanwhile, the dollar index eased to 100.71 after rising to 100.87, making gold slightly cheaper for buyers in overseas currencies.

Crude oil prices are back above $90 per barrel, stoking inflation fears and expectations of interest rate hikes.

While gold is considered an inflation hedge, its price tends to decline during periods of elevated interest rates, as higher rates increase the opportunity cost of holding a non-yielding asset like gold.

As per Reuters, the CME FedWatch Tool indicates the market is now pricing an 82% chance of a December interest rate hike, up from 73% last week.

"The renewed geopolitical conflict has shifted focus back to the Federal Reserve's interest rate outlook, although recent U.S. inflation and labour market data have pointed to a softer economic backdrop. Markets briefly priced in nearly a 40% probability of a July rate hike before those expectations eased to around 10%. Despite the pullback, gold continues to struggle as higher oil prices and a stronger dollar outweigh traditional safe-haven demand," Ravi Singh, Chief Research Officer at Master Capital Services, observed.

Sugandha Sachdeva, the founder of SS WealthStreet, pointed out that despite the ongoing correction, prices have now approached a critical long-term support zone that has remained intact since October 2025 on the weekly charts, suggesting that prices could find some cushion here.

Gold and silver prices: Key levels to watch

As per Singh, MCX gold is maintaining a clear lower highs and lower lows formation on the daily chart. Prices remain below the 21-day and 55-day EMAs, indicating that bearish momentum is still intact.

"The next important support is placed near ₹1,36,000, while on the upside, the 21-day EMA around ₹1,44,000 is expected to act as a strong resistance. As long as prices trade below this level, the preferred strategy remains sell on rise," said Singh.

Manoj Kumar Jain of Prithvifinmart Commodity Research said gold has support at $3,989 and $3,945, while resistance is at $4,040 and $4,074 per troy ounce, and silver has support at $55.50 and $54.40, while resistance is at $57.50 and $58.80 per troy ounce in today’s session.

MCX gold, as per Jain, has support at ₹1,40,400 and ₹1,39,650 and resistance is at ₹1,41,500 and ₹1,42,200, while silver has support at ₹2,14,400 and ₹2,11,000 and resistance at ₹2,18,800 and ₹2,21,000.

"We suggest long-term investors could accumulate gold and silver in SIP mode in this market fall, but traders must follow a stop loss at ₹1,39,650 in gold and ₹2,14,000 in silver on a closing basis in the long positions and book profits on every rise," said Jain.

"On the international front, gold is finding strong support in the $3,940-$3,950 per ounce region, a zone that coincides with a long-standing support zone that has held firm since October 2025 on a weekly closing basis, making it a decisive level for the medium-term trend. Meanwhile, upside remains capped near the $4,220 per ounce mark, which continues to act as formidable resistance," said Sachdeva.

"In the domestic market, ₹1,40,500 per 10 grams has emerged as a crucial support on the weekly charts. As long as prices sustain above this mark on a weekly closing basis, bargain buying is likely to emerge, which could trigger a recovery towards ₹1,43,500 per 10 grams initially and subsequently ₹1,45,600 per 10 grams," said Sachdeva.

However, Sachdeva added that the broader trend continues to favour correction and consolidation.

"A decisive weekly close below ₹1,40,500 would confirm a breakdown of this crucial support zone, accelerating the decline towards ₹1,37,000, followed by ₹1,35,000. Until prices decisively break above the immediate resistance zone, the metal is expected to remain range-bound with a negative bias, while the ₹1,40,500 level will continue to be the key trend-defining support to watch," Sachdeva said.

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Disclaimer: This article is for educational purposes only and does not constitute investment advice. 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.