Gold prices in the domestic futures market took a breather on Friday morning, dipping due to profit-booking as traders capitalized on previous gains. As of 9:35 AM IST, MCX Gold December contracts were trading 0.28% lower at Rs 78,110 per 10 grams.
This came as the U.S. dollar held steady after a sharp drop earlier this week, and U.S. Treasury yields declined from recent highs, creating a softer stance in the global market.
The dip follows an all-time high for MCX Gold in December contracts, which surged to Rs 78,919 per 10 grams on Wednesday.
Although factors like Middle Eastern tensions and ongoing U.S. election uncertainties favor safe-haven assets like gold, profit-taking appears to have tempered the upward trend.
The Dollar Index, measuring the U.S. currency against six major peers, showed little movement today after taking its largest single-day hit in a month, adding to a subdued outlook for bullion.
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U.S.-Israel Tensions and Fed Policy Speculation
Geopolitical factors continue to weigh on the market. Reports indicate that U.S. and Israeli officials plan to meet in Doha for discussions regarding a possible Gaza ceasefire, creating a watchful atmosphere among traders.
On the U.S. election front, the contest between Vice President Kamala Harris and former President Donald Trump is heating up, adding to market jitters.
Less than two weeks remain until the pivotal November 5 election, with investors remaining cautious about the potential economic impact of a tight race.
The U.S. labor market’s status has drawn attention. A Reuters report on Thursday showed an unexpected drop in unemployment aid applications last week, but a rise in mid-October benefit recipients to a nearly three-year high.
This dynamic suggests a slight tightening in the U.S. job market, influencing expectations around Fed policy decisions. The CME Fed-Watch Tool currently indicates a 96.9% probability of a modest 25-basis point cut at the Federal Reserve’s upcoming November meeting.
MCX Gold and Silver T
Manoj Kumar Jain, a commodity analyst at Prithvifinmart Commodity Research, suggests cautious positioning on MCX Gold and Silver for October 25.
Jain indicates that MCX Gold December contracts have support levels at Rs 78,040 and Rs 77,800, with resistance pegged at Rs 78,550 and Rs 78,800. For silver, support stands at Rs 96,100 and Rs 95,400, while resistance is noted at Rs 97,750 and Rs 98,600.
Jain recommends using any price dips as buying opportunities, especially for silver, where he suggests entering around Rs 96,200 with a target of Rs 97,700, placing a stop loss at Rs 95,500.
Global Trends in Precious Metals
Internationally, gold’s appeal remains strong amid the ongoing economic and political uncertainties, and central banks’ easing monetary stance further underpins prices.
Major brokerage firms, like Angel One, emphasize the heightened uncertainty around the U.S. election as a critical factor supporting gold.
Notably, gold prices have risen by over 32% this year, propelled by its appeal as a hedge against global economic and geopolitical risks.
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