MCX Gold Drops Rs 2,400 per 10 Grams and Silver Slumps Rs 3,400 per Kg on Dhanteras Amid Rising Fed Rate Hike Bets
Domestic bullion prices took a sharp tumble on the Multi Commodity Exchange (MCX) on Dhanteras, catching festive jewellery buyers and commodity traders by surprise after a strong mid-week rally. Gold futures dropped by up to Rs 2,377, or 1.64%, touching an intraday low around Rs 1,41,718 per 10 grams. Silver experienced an even steeper decline, shedding Rs 3,440, or 1.83%, to trade near Rs 1,83,700 per kilogram.
The sudden decline in precious metals comes as a sharp turnaround for the domestic market, which had witnessed strong festive enthusiasm and price gains in the run-up to Diwali.
Global Triggers: Oil Rebound and Rate Hike Expectations
The primary catalyst behind the sudden price drop was a rebound in international crude oil prices, which reignited global inflation concerns and shifted monetary policy expectations. Higher energy prices have led traders to price in a higher probability of tighter policy from the US Federal Reserve.
According to data from the CME FedWatch tool, market participants priced in a 71% probability of a Fed interest rate hike in December. Higher benchmark interest rates elevate the opportunity cost of holding non-yielding assets such as gold and silver, triggering liquidations in bullion markets. A downward revision of price forecasts by Wall Street brokerage Goldman Sachs also added pressure on global sentiment. In international trade, spot gold slipped 0.6% to $4,063.39 per ounce, while US gold futures fell roughly 1% to $4,072.90.
Domestic Impact and Currency Dynamics
In the Indian market, a relatively firm rupee limited the currency-related cushion that domestic prices often receive during global downturns. Ponmudi R, Chief Executive Officer of Enrich Money, noted that silver saw sharper losses due to its higher beta relative to gold. He highlighted that the near-term bias for gold remains cautiously weak, with prices needing a sustained recovery above Rs 1,43,700 per 10 grams to stabilise, whereas a decisive breach below Rs 1,40,000 could trigger deeper downside towards Rs 1,38,300.
Key Levels and Festive Buying Strategy
Despite the intraday correction, traditional demand remains robust across major jewellery hubs in Delhi, Mumbai, and Bengaluru, where footfalls for Dhanteras coins, bars, and lightweight ornaments typically peak. Market experts view the pullback as a favourable development for retail consumers who were earlier deterred by elevated rates.
Key Technical Levels to Watch on MCX:
- Gold Support: Analysts peg immediate support between Rs 1,42,000 and Rs 1,41,400 per 10 grams, with critical secondary support at Rs 1,40,000.
- Gold Resistance: Immediate hurdles are placed at Rs 1,44,400 to Rs 1,45,500 per 10 grams.
- Silver Support: Downside buffers for December futures are placed between Rs 1,85,000 and Rs 1,81,800 per kg.
- Silver Resistance: Upside recovery faces selling pressure near Rs 1,89,100 to Rs 1,91,400 per kg.
Manoj Kumar Jain of Prithvi Finmart recommended that medium-term buyers use dips towards the Rs 1,42,400–Rs 1,41,000 range to accumulate gold, keeping a stop loss below Rs 1,40,000 for targets of Rs 1,44,400 to Rs 1,45,500. For domestic investors, staggered accumulation during Dhanteras remains a prudent approach while awaiting further direction from incoming US macroeconomic data.
