Gold prices experienced a sharp decline on Thursday, mirroring the downward trend in international markets as the US dollar strengthened and hopes for imminent Federal Reserve rate cuts diminished.
Market Forces Driving the Decline
The precious metals market faced significant headwinds as the dollar index climbed to 105.20, making gold more expensive for holders of other currencies. Simultaneously, Federal Reserve officials' cautious comments about inflation have pushed back expectations for rate cuts, reducing gold's appeal as a non-yielding asset.
Key Price Levels for Indian Investors
On the Multi Commodity Exchange (MCX), gold June futures contracts opened lower, trading around ₹71,200 per 10 grams after previously reaching highs near ₹72,400. Market analysts identify crucial support levels between ₹70,800 and ₹71,000, with resistance expected around ₹71,800.
Silver Follows Gold's Downward Trend
Silver prices also retreated, with July futures on MCX trading near ₹91,200 per kg. The white metal faces immediate resistance around ₹92,500, while support lies at the ₹90,500 level. Silver's industrial applications make it particularly sensitive to broader economic sentiment.
Expert Market Analysis
"The combination of dollar strength and reduced rate cut expectations has created perfect conditions for a gold price correction," noted a senior commodity analyst. "Indian investors should monitor these key technical levels closely, as breaking below support could trigger further declines."
Global Market Context
Internationally, spot gold traded near $2,345 per ounce, while silver hovered around $30.25. The markets are closely watching upcoming US economic data and Federal Reserve commentary for further direction on interest rate policies.
Market participants remain cautious as they assess whether this represents a temporary correction or the beginning of a more sustained downtrend for precious metals.
