Gold Dip Nearly 1% While Silver Rises on MCX: Key Factors Influencing Bullion Prices Revealed

Gold prices experienced a nearly 1% decline in futures trading on October 5, with the December delivery price falling ₹1,020 to reach ₹1.49 lakh per 10 grams. In contrast, silver showed resilience, gaining over 0.5%, with December delivery prices rising ₹1,223 to ₹2.27 lakh per kg. The dollar index remained strong, hovering near an 18-month high of 102.37, which, coupled with elevated US Treasury yields, continued to pressure gold prices, pushing them down further from the previous week’s close of ₹1.5 lakh per 10 grams.

The movement in commodity prices is largely attributed to a confluence of global economic indicators and geopolitical factors. A stronger US dollar has further intensified the pressure on gold, overshadowing softer US economic data that had initially reduced expectations of an October Federal Reserve rate hike. Analysts highlight that the 10-year Treasury yield is maintaining an elevated level around 5.2%, driven by inflation concerns and substantial government borrowing. However, physical gold demand in India remains steady, showing some selectivity as consumers and jewelers strategize their purchases, especially with the festive season approaching.

Traders and investors are advised to monitor key upcoming economic data and geopolitical developments that could influence market sentiment. The likelihood of gold remaining in a range-bound market persists, with support identified at ₹1.45 lakh per 10 grams and resistance at ₹1.51 lakh per 10 grams. As the Federal Reserve’s October policy decision approaches, it could serve as a critical pivot point for market dynamics. Volatility in bullion prices is expected this week, contingent on fluctuations in the dollar, bond yields, and broader economic indicators.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)