Gold and Silver shining away: Expected to Decline as Dollar Surges Amid Economic Recovery

Discover How Global Cues and Economic Factors Are Impacting Your Precious Metals Investments


Are you one of the many investors closely following the ebb and flow of gold and silver prices? If so, recent developments in the precious metals market have likely piqued your interest. Gold and silver, often seen as safe havens during economic uncertainty, have been on a rollercoaster ride recently. 

Gold & Silver slipping away

Imagine waking up one morning to discover that your prized possessions, gold and silver, are slipping through your fingers. That’s precisely what many investors felt on 03,Tuesday,23. as gold opened at Rs 57,426 per 10 grams on MCX and hit an intraday low of Rs 56,565. Meanwhile, in the international market, gold prices hovered around $1,817.38 per troy ounce. Silver had a similarly bumpy ride, opening at Rs 69,255 per kg on MCX and dipping to an intraday low of Rs 65,666. International silver prices danced around $20.77 per troy ounce. The question on everyone’s mind is, “Why is this happening?”

The Key Factors

The slump in gold and silver prices can be attributed to a few key factors. Firstly, the rising dollar index has been a formidable force, climbing from a low of 99.60 to more than 107 in just two months—an impressive 7.5% surge. Simultaneously, US 10-year yields made their own upward journey, jumping from 3.7% to 4.7%. These numbers indicate a strengthening US economy.

Manav Modi, an analyst at Motilal Oswal Financial Services, notes that US manufacturing has shown signs of recovery, with increased production and employment gains in September. Anuj Gupta, Head of Commodity and Currency at HDFC Securities, believes that gold prices may continue to fall, especially after breaking support at $1880.

What to Watch For

Now, as an investor, you might wonder what to anticipate in the coming days. Comex Spot Gold has immediate strong support at $1850 and resistance at $1893, while MCX Gold December futures are expected to find resistance at 58600 and support at 57980/57700 for the day. But beyond these technical levels, what else should you keep an eye on?

Investors should pay attention to critical data points such as US job openings and India’s manufacturing data, as they can provide vital cues regarding the direction of gold and silver prices. These economic indicators can shed light on whether the recent dip in prices is a temporary setback or part of a more significant trend.

Conclusion: Navigating the Waves of Uncertainty

In conclusion, the world of gold and silver investments is experiencing some turbulence as the dollar strengthens and the US economy rebounds. Understanding the preferences and pain points of investors like you is crucial during these times. By keeping a watchful eye on global cues and economic data, you can make informed decisions about your precious metals investments. As the tides continue to shift, knowledge and insight will be your greatest allies in safeguarding your financial interests.

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