Daijiworld Media Network - New Delhi
New Delhi, Oct 30: Gold and silver prices declined by up to 2 per cent on Friday amid growing expectations of a further interest rate hike by the US Federal Reserve, with silver witnessing a sharper correction of more than Rs 4,000 per kg during the trading session.
On the Multi Commodity Exchange (MCX), December gold futures fell as much as 0.63 per cent, or Rs 911, to touch an intraday low of Rs 1,41,685 per 10 grams. At around 12.20 pm, gold was trading at Rs 1,41,800, down Rs 796 or 0.56 per cent from its previous close.
Silver futures registered steeper losses, declining Rs 4,282 or 2.26 per cent to hit an intraday low of Rs 1,85,171 per kg. At the latest count, silver was trading at Rs 1,85,500, down Rs 3,953 or nearly 2 per cent.
The correction comes as consumers prepare for Dhanteras and Diwali purchases, offering some relief to festive buyers amid the recent surge in precious metal prices.
In the international market, spot gold declined 0.7 per cent to around $3,991 per ounce, while spot silver fell 1.6 per cent to $51.27 per ounce.
Market experts said precious metals remained under pressure following the US Federal Reserve's hawkish pause on interest rates.
The US central bank kept its benchmark interest rates unchanged in the range of 3.75 to 4 per cent in a 10-2 vote, with policymakers continuing to express concerns over persistently high inflation.
Fed Chair Kevin Warsh indicated that inflation remained stubbornly elevated, while two policymakers reportedly favoured an interest rate hike.
Since the announcement, a series of stronger-than-expected economic indicators have further strengthened expectations that borrowing costs could remain elevated for a longer period.
Commodity experts said gold was approaching a crucial support zone of Rs 1.40 lakh to Rs 1.41 lakh per 10 grams. A decisive break below this range could push prices further down towards Rs 1.37 lakh to Rs 1.38 lakh.
For silver, the next major support level is seen between Rs 1.83 lakh and Rs 1.85 lakh per kg. Experts noted that the metal had already undergone a significant correction from its historic peak.
Despite the recent weakness, analysts believe the prevailing price levels could offer attractive opportunities for long-term investors and festive buyers. However, they cautioned that the near-term direction of precious metals would largely depend on the Federal Reserve's policy outlook, the US dollar index, Treasury yields and crude oil prices.
Crude oil prices are also being closely watched amid escalating geopolitical tensions in West Asia, developments involving Iran and concerns over possible disruptions to global supplies.