MUMBAI– Gold and silver prices continued to slide on Monday as higher margin requirements on the Chicago Mercantile Exchange are set to take effect, adding pressure to precious metals markets.
On the Multi Commodity Exchange, gold February futures fell 1.77 percent intraday to Rs 1,45,132 per 10 grams, while silver March futures dropped sharply by 6.88 percent to Rs 2,47,386 per kilogram.
Analysts said the sharp correction from record highs began after U.S. President Donald Trump selected Kevin Warsh as the next Federal Reserve chairman. Market participants reacted negatively, viewing Warsh as more aggressive on interest rate policy than his predecessors.
The selloff was further reinforced by a stronger U.S. dollar, rising Treasury yields, and upbeat U.S. inflation data, including producer price and core producer price indices. Domestically, bullion prices also came under pressure after the Union Budget left import duties unchanged, hurting the domestic premium, said Rahul Kalantri, vice president for commodities at Mehta Equities Ltd.
In international markets, analysts expect silver to find support near $68, while gold may hold around $4,510 this week. Spot gold recovered significantly after falling about 4 percent during early Asian trading hours on Monday.
“Gold has support in the Rs 1,39,650 to Rs 1,36,310 range, with resistance at Rs 1,48,850 and Rs 1,50,950. Silver has support at Rs 2,48,810 and Rs 2,37,170, while resistance is seen at Rs 2,78,810 and Rs 2,95,470,” Kalantri said.
Despite the recent pullback, analysts noted that the broader trend for COMEX gold remains constructive. The recent sharp rally pushed momentum indicators into overbought territory, triggering profit-taking and a period of price consolidation at elevated levels.
Silver continues to be supported by structural supply deficits and steady industrial demand. For gold, persistent safe-haven interest, ongoing central bank buying, and expectations of accommodative global monetary conditions continue to provide longer-term support.
However, a recent report from WhiteOak Capital Mutual Fund advised investors to pare back precious metals exposure to safe-haven allocation levels, particularly in silver, where valuations have become stretched relative to historical norms. (Source: IANS)
