Gold prices in the domestic market saw a decline on Monday, even as silver prices moved higher, amid shifting expectations regarding Federal Reserve interest rate policy and ongoing geopolitical tensions in the Middle East.
MCX gold futures for December 2026 delivery fell by Rs 1,400 to Rs 1,49,050 per 10 grams. In contrast, MCX silver futures for the same delivery period rose by Rs 1,025 to Rs 2,26,902 per kg. Internationally, spot gold rose 0.4% to $4,158.17 per ounce, while spot silver gained 1.7% to $61.40 per ounce.
The price action follows softer-than-expected US job growth data released on Friday, which significantly lowered market expectations for a Federal Reserve rate hike in October. According to the CME FedWatch Tool, the probability of an October rate hike has dropped to 22%, down from 64% a week earlier. However, the likelihood of a rate increase in December remains high at 87%. The Federal Reserve had previously raised its benchmark overnight interest rate by 25 basis points to a range of 3.75%-4.00% last month.
Geopolitical developments continue to influence precious metal prices. The internationally recognized government of Yemen has launched a military campaign against Houthi-controlled areas, while concerns persist regarding potential damage to Gulf oil infrastructure amid the ongoing conflict. Oil prices have slipped due to increased crude exports from the Middle East and the release of oil stocks by G7 nations.
Periods of heightened market uncertainty, including international conflicts and the coronavirus pandemic, have historically driven investors toward gold as a reliable safe haven. According to The Economic Times, on Sunday, the internationally recognized government of Yemen backed by Saudi Arabia announced a major military campaign directed at regions controlled by Iran-backed Houthi forces.
Analysts suggest that gold is currently holding support at $4,110 per troy ounce, with further strength expected only if prices sustain above $4,255. On the MCX, December gold is supported at Rs 1,47,700, with resistance noted at Rs 1,52,000. Manoj Kumar Jain of Prithvi Finmart has recommended that traders avoid taking fresh positions in gold and silver for the time being, citing the upcoming long weekend and uncertainty surrounding US-Iran peace talks. The US Dollar has surged to a fresh year-to-date high, which continues to cap gains for gold despite the receding expectations for an immediate Fed rate hike.
Prithvi Finmart recommended avoiding fresh gold and silver positions amid the long weekend, noting gold support at $4,110 per troy ounce and silver support at $59.10 per troy ounce.
