Gold and Silver lose shine after record rally: Here are key levels and trading strategy investors should watch this week

After a two-month-long historic rally, gold and silver prices witnessed a sharp correction last week as profit-booking took over both global and domestic markets.

The rebound in the US dollar index, positive trade developments between the US, China, and India, and easing geopolitical tensions following the Gaza peace deal triggered selling pressure across precious metals.

Gold and silver, which had been trading at record highs earlier this month, ended the week on a weaker note.

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In international markets, gold December futures settled at $4,137.80 per troy ounce, down 0.19 per cent, while silver December futures closed at $48.586 per troy ounce, down 0.24 per cent.

In the domestic market, gold December futures on MCX ended at Rs 1,23,451 per 10 grams, slipping 0.53 per cent, and silver December futures settled at Rs 1,47,470 per kilogram, lower by 0.70 per cent.

Historic Bull Run Faces Correction

According to Manoj Kumar Jain of Prithvi Finmart, gold and silver witnessed heavy profit-taking after a two-month-long rally.

“Gold and silver showed a heavy sell-off last week after a two-month historic bull run. Both precious metals plunged from record-high levels amid a rebound in the dollar index and positive trade talks of the United States with China and India. The Gaza peace deal and rebound in the dollar index also triggered profit-taking in both precious metals,” Jain said.

He added that while the correction was overdue, “the US shutdown and cooling off in US inflation supported bullion prices at lower levels. The possibility of US Fed rate cuts is also lending support to gold and silver prices.”

Global Cues to Drive Market Sentiment

Global developments are expected to play a key role in determining price trends in the coming week.

Investors will closely track the US Federal Reserve’s monetary policy meeting, the meeting between US President Donald Trump and China’s President Xi Jinping in South Korea, and the European Central Bank’s policy review later this week.

These events, along with movements in the dollar index, are likely to keep gold and silver prices highly volatile. Jain believes that the combination of geopolitical and monetary policy factors will drive near-term price action and investor sentiment.

Key Price Levels and Trading Range

Jain highlighted that gold is currently holding its crucial “make-or-break” level of $3,870, while silver is managing to sustain support near $46.50 per troy ounce in the international market.

He expects gold to trade between $3,970 and $4,280 per troy ounce, and silver to move within $46.50 to $51.50 per troy ounce this week.

Gold has support at $4,096–4,060 and resistance at $4,174–4,210, while silver has support at $48.00–47.40 and resistance at $49.10–49.80 per troy ounce.

On the domestic front, Jain noted that gold is likely to find support around Rs 1,22,650–Rs 1,21,400 and face resistance at Rs 1,24,200–Rs 1,25,100 per 10 grams. Silver may find support near Rs 1,46,000–Rs 1,44,400 and encounter resistance around Rs 1,48,800–Rs 1,50,500 per kilogram.

Jain suggests that traders should remain cautious and avoid aggressive positions until some stability returns to the market.