Mumbai saw a modest decline in gold and silver prices on Tuesday, the second trading day of the week, primarily driven by a stronger US dollar and investors cashing in on recent gains. Despite this short-term pullback, geopolitical tensions in various global hotspots continue to provide underlying support for these precious metals in the medium term.
On the Multi Commodity Exchange (MCX), February delivery gold futures slipped 0.33% to settle at ₹1,57,550 per 10 grams. March silver contracts experienced a sharper fall of 1.92%, closing at ₹2,57,567 per kilogram. Early in the session, silver plunged over 2% to ₹2,57,100 per kg, while gold dropped 1.3% to ₹1,56,001 per 10 grams, before a partial recovery.
The US dollar index strengthened to 97.01 from 96.82 in the previous session, making gold and silver costlier for international buyers and dampening demand. Market participants anticipate at least two 25 basis point rate cuts by the US Federal Reserve this year, which typically benefits non-yielding assets like gold and silver by lowering the opportunity cost of holding them.
Tensions between the US and Iran persist despite some positive diplomatic signals, with Washington advising American-flagged vessels to avoid Iranian waters. Experts note that long-term bullish momentum for gold remains intact on the Comex, with the recent dip attributed to routine profit-taking.
Silver shows robust buying interest in the $65-70 range on Comex, aligning with historical support levels. Domestic supports for gold are seen at ₹1,56,600 and ₹1,54,800, with resistance at ₹1,59,100 and ₹1,60,000. For silver, supports lie at ₹2,55,500 and ₹2,48,800, while resistance levels are ₹2,68,000 and ₹2,74,000.
Analysts highlight sustained industrial demand and supply shortages bolstering silver’s long-term uptrend, alongside safe-haven buying and central bank purchases supporting gold. Investors are now closely watching the US January non-farm payrolls and inflation data for clues on Fed policy direction.