Precious Metal Prices Fall on Profit Booking and Stronger Dollar

New Delhi – Gold and silver prices witnessed a moderate decline on Tuesday, primarily due to profit booking by investors and a strengthening US dollar, although ongoing geopolitical tensions continued to support precious metals in the medium term.

MCX gold futures for February delivery fell by 0.33 per cent to Rs 1,57,550 per 10 grams during intra-day trading. Similarly, MCX silver futures for March delivery dropped by 1.92 per cent to Rs 2,57,567 per kilogram.

Earlier in the trading session, silver prices slipped more than 2 per cent to touch an intraday low of Rs 2,57,100 per kg, while gold prices declined 1.3 per cent to Rs 1,56,001 per 10 grams before recovering slightly.

The decline came as the dollar index strengthened to 97.01 from 96.82 in the previous session, making dollar-denominated bullion more expensive for international buyers.

Market expectations of at least two interest rate cuts of 25 basis points each during the year have generally supported bullion prices, as lower interest rates tend to boost demand for precious metals. However, despite signs of diplomatic engagement, tensions between the United States and Iran continue to remain elevated, with Washington advising US-flagged ships to avoid Iranian waters.

Market participants indicated that the overall upward trend in COMEX gold remains intact, with the recent decline largely reflecting profit booking and normal price consolidation. Strong buying interest has also been observed in the $65–$70 support range for COMEX silver, which coincides with earlier price lows and long-term trend support.

According to analysts, gold has immediate support levels at Rs 1,56,600 and Rs 1,54,800, while resistance is expected around Rs 1,59,100 and Rs 1,60,000. For silver, support is seen at Rs 2,55,500 and Rs 2,48,800, with resistance at Rs 2,68,000 and Rs 2,74,000.

Experts noted that structural supply shortages and consistent industrial demand continue to support a positive long-term outlook for silver. Meanwhile, sustained safe-haven demand and steady buying by central banks remain key factors strengthening gold’s long-term prospects.

Investors are now closely watching upcoming economic indicators, including the US non-farm payrolls report for January and inflation data expected later this week, for further clarity on the Federal Reserve’s interest rate direction.

With inputs from IANS