Gold and silver prices are falling at a time when many Indians are preparing to buy precious metals for the festive season. With Karwa Chauth, Dhanteras and Diwali around the corner, the decline may offer some buyers an opportunity to purchase gold and silver at lower prices.
But with global uncertainty weighing on bullion, should investors buy now or wait for prices to fall further?At the time of writing, MCX gold was trading at Rs 1,42,611 per 10 grams, down 0.49%, while MCX Silver was at Rs 1,96,198 per kg, falling 1.71%.The decline comes as rising crude oil prices fuel concerns that interest rates in the US could remain high for longer. Investors are also watching the upcoming US Federal Reserve policy meeting and inflation data for clues about the direction of precious metal prices.WHY ARE GOLD AND SILVER PRICES FALLING?Gold and silver are facing pressure as rising energy prices have raised concerns about inflation and the possibility of interest rates staying elevated for longer.
Higher interest rates tend to weigh on precious metals because they do not pay interest or dividends, making them less attractive compared with interest-bearing investments. Dr Renisha Chainani, Chief Research Officer at Augmont, said gold and silver were on track for their sharpest weekly fall in more than four months.“Rising oil prices have renewed fears that interest rates will stay higher for longer, and investors are holding back ahead of next week’s Federal Reserve policy meeting,” she said.
Oil prices jumped around 4% to a five-month high on Thursday after Houthi attacks on Saudi Arabia raised concerns about further disruption to energy supplies. Higher energy costs can add to inflationary pressure, making it more likely that the US Federal Reserve will keep interest rates elevated for longer.Investors are now turning their attention to the Fed's October 27–28 meeting and the upcoming personal consumption expenditures (PCE) inflation data.
PCE is the central bank's preferred measure of inflation as it works towards its 2% target.WHERE ARE GOLD AND SILVER PRICES HEADED NEXT?Despite the recent fall, Chainani believes the two metals could find support around their current levels before recovering in the coming weeks.“Both metals are trying to build a base, gold around $3,950–4,000 and silver around $50–55. These are strong support and accumulation zones.
We expect prices to hold here and then rebound 10–15% over the coming weeks,” she said.She added that gold needs to remain above $4,200 and silver above $62 for their upward trends to resume.However, these levels are not guaranteed to hold, and prices could remain volatile depending on oil prices, inflation data and the US Federal Reserve's policy decision.Ponmudi R said gold and silver were showing weakness in domestic futures trading, with both metals opening lower.“MCX gold opened with a gap down near Rs 142,060 and is trading around Rs 142,450, down 0.60%, recovering modestly from the opening low. The Rs 143,000–Rs 143,700 range, which previously acted as support, now forms immediate resistance, followed by Rs 145,300–Rs 146,000,” he said.For silver, the outlook remains weak after prices fell below an important support zone.“MCX silver opened with a sharp gap down near Rs 196,590 and is trading around Rs 196,050, down 1.78%, extending its decline below the Rs 200,000–Rs 202,000 support zone,” Ponmudi added.These levels suggest that both metals may need to regain lost ground before a sustained recovery can take shape.
Investors should keep in mind that technical levels can change quickly as market conditions evolve.SHOULD YOU BUY GOLD AND SILVER NOW OR WAIT?With the festive season underway, falling prices may tempt buyers to purchase gold and silver immediately. However, the next move in bullion prices will depend on global economic developments, making it difficult to predict the exact bottom.For people buying jewellery for Dhanteras or Diwali, splitting purchases into smaller amounts rather than buying everything at once can help reduce the risk of investing the entire sum just before another price decline.
Buyers should also compare making charges and other costs, as these affect the final jewellery bill.Those investing in gold and silver for the long term should consider their financial goals, investment horizon and risk appetite instead of making decisions based only on short-term price movements. A staggered approach can help spread the purchase price over time, although it does not guarantee profits or protect against losses.Investors looking to trade futures should be particularly careful, as prices can move sharply and leveraged positions can magnify losses.With the US Fed meeting and inflation data approaching, volatility may continue in the near term.
For festive buyers, the focus should be on purchasing within their budget rather than trying to predict the exact lowest price. For investors, patience and a planned approach may be more useful than reacting to every market move.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group.
It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends