Gold and silver turn volatile ahead of FOMC; Silver hits record high on physical shortages

Gold and Silver Price Today: Gold and silver continued to witness sharp price swings ahead of the crucial US Federal Reserve’s monetary policy meeting this week.

According to market analyst Manoj Kumar Jain, both precious metals are experiencing “very high price volatility” due to uncertainty surrounding interest rate expectations, currency movements, and tight physical supply, especially in silver.

International and Domestic Price Movement

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In the international market on Friday, gold settled slightly lower. The February gold futures closed at $4,227.60 per troy ounce, down 0.26 per cent, while March silver futures surged 2.72 per cent to $59.053 per troy ounce.

In India, however, the weak rupee helped domestic prices end higher. Gold February futures on MCX settled at Rs 1,30,462 per 10 grams, up 0.30 per cent, and silver March futures closed at Rs 1,83,408 per kg, gaining 2.96 per cent.

What’s Driving Volatility: Jain’s View

Jain noted that a mixed set of US economic data last week contributed to the volatility. The dollar index slipped to a one-month low, and expectations of potential Fed rate cuts supported bullion. However, gold came off its highs as US bond yields rebounded and weekly unemployment claims declined.

Silver outperformed gold due to strong industrial demand and tightening physical supply. “Physical delivery shortages and gains in base metals have pushed silver to record high levels,” Jain said. He added that domestic prices were further supported by the depreciation of the rupee.

In the global market, Jain expects gold and silver to hold their key support levels of $3,960 and $54.40 per troy ounce, respectively. For the week, he sees gold trading in the range of $3,960–4,380, while silver may move between $54.40–62.80 per troy ounce.

Support, Resistance and Trading Strategy

For the day, he identifies support for gold at $4,200–4,164 and resistance at $4,250–4,288. Silver has support at $57.70–56.80 and resistance at $60.00–61.40 per troy ounce.

On MCX, gold has support at Rs 1,29,740–1,29,000 and resistance at Rs 1,31,200–1,32,000. Silver holds support at Rs 1,81,800–1,80,000, with resistance at Rs 1,85,500–1,88,000.

Jain suggests buying on dips, recommending gold around Rs 1,29,800–1,29,000 with a stop-loss below Rs 1,27,700 and targets of Rs 1,31,200–1,32,000.

For silver, he advises accumulation near Rs 1,81,500–1,79,500 with a stop-loss below Rs 1,76,600 and an upside target of Rs 1,85,500–1,88,000.