Mumbai: Gold and silver prices declined on Tuesday, November 3, as weakness in international bullion markets weighed on domestic futures despite the approaching festive season and Dhanteras. Gold futures fell by more than Rs 1,300 per 10 grams at their intraday low, while silver dropped over Rs 4,600 per kg, slipping below the Rs 1.80 lakh mark on the Multi Commodity Exchange (MCX).
Investors remained cautious as they assessed the outlook for US interest rates and awaited developments surrounding the US midterm elections. The decline came after precious metals staged a brief recovery in the previous trading session, indicating that the recent pressure on bullion prices had not eased.
The fall also came at a time when demand for gold and silver typically receives attention from buyers preparing for the festive and wedding seasons. However, the immediate movement in domestic prices continued to reflect international market trends, currency movements and expectations about monetary policy.
Gold futures decline below Rs 1.40 lakh
On the MCX, December gold futures were trading at Rs 1,39,026 per 10 grams at 10.31 am on November 3, down Rs 1,160, or 0.83%, from the previous close.
Earlier in the session, the yellow metal touched an intraday low of Rs 1,38,800 per 10 grams. At that level, gold had declined by approximately Rs 1,386, highlighting the pressure on domestic bullion prices.
The decline took gold futures below the Rs 1.40 lakh level, which has emerged as an important near-term price zone in the current market movement. The metal’s inability to sustain higher levels has kept traders cautious about the possibility of further declines.
The domestic market’s movement also followed weakness in international gold prices. With investors weighing the possibility of higher US interest rates, demand for non-yielding assets such as gold remained under pressure.
Silver falls over Rs 4,600 per kg
Silver recorded a sharper decline than gold during the morning session.
December silver futures on the MCX fell Rs 4,622, or 2.51%, to Rs 1,79,157 per kg after the market opened. This was against the previous close of Rs 1,83,779 per kg.
At around 10.33 am, silver was trading at Rs 1,79,434 per kg, down Rs 4,345, or approximately 2.36%.
The decline pushed the white metal below the Rs 1.80 lakh mark, a level that traders will be watching closely in the coming sessions. Silver’s fall was steeper than gold’s, indicating relatively stronger selling pressure in the metal.
Unlike gold, silver has both investment and industrial uses. Its prices can therefore respond to changes in investor sentiment as well as expectations about industrial demand. The latest decline, however, came amid broader weakness across international precious metal markets.
Why are gold and silver prices falling?
International bullion prices came under pressure as investors assessed the US political and monetary policy outlook ahead of the midterm election results.
Spot gold declined 0.5% to $3,926.52 per ounce, while spot silver fell 1.8% to $49.71 per ounce. The weakness in international markets contributed to the decline in domestic futures.
Interest rate expectations were another important factor influencing investor sentiment. Markets were pricing in a 74% probability of a US Federal Reserve rate hike in December, according to the figures cited in the market update.
Higher interest rates can make interest-bearing investments more attractive compared with gold, which does not generate interest or regular income. As a result, expectations of tighter monetary policy can weigh on demand for the yellow metal.
Investors were also monitoring the broader economic and political outlook in the United States. Uncertainty surrounding the midterm election outcome added to the cautious mood, with traders assessing how developments could influence financial markets and policy expectations.
For domestic buyers, currency movements also remain relevant. A stronger Indian rupee can reduce the cost of imported gold and put pressure on local prices, even when international bullion prices remain relatively elevated.
Gold technical outlook: Support at Rs 1.37 lakh
Ponmudi R, CEO of Enrich Money, said MCX gold was facing near-term weakness after failing to sustain levels above Rs 1,40,000 per 10 grams.
According to the analyst, the immediate support zone for gold is between Rs 1,37,500 and Rs 1,38,300. These levels could become important if selling pressure continues.
On the upside, a sustained recovery above Rs 1,40,000 to Rs 1,41,000 would be necessary to stabilise the price trend. Until gold moves convincingly above this range, the market may continue to face pressure.
Ponmudi also cautioned that a decisive break below the immediate support zone could expose gold to further declines towards Rs 1,34,000 to Rs 1,35,000 per 10 grams.
Technical indicators are also pointing towards a weak trend. The Relative Strength Index (RSI) was near 32, while a widening negative Moving Average Convergence Divergence (MACD) histogram indicated that bearish momentum remained in place.
The analyst also noted that a firmer rupee was weighing on domestic gold prices. Currency movements, alongside international bullion trends, will therefore remain important factors for traders.
Silver technical outlook: Rs 1.78 lakh support under watch
Silver has experienced a sharper correction than gold, and its immediate support zone on the MCX is between Rs 1,78,000 and Rs 1,80,000 per kg, according to Ponmudi.
A decisive break below this range could expose silver to further weakness, with the next downside levels placed between Rs 1,70,000 and Rs 1,72,000 per kg.
On the upside, the immediate resistance zone is between Rs 1,86,000 and Rs 1,88,000 per kg. A stronger recovery beyond this range could bring the next resistance level of Rs 1,94,000 to Rs 1,96,000 into focus.
The RSI for silver was near 23, indicating deeply oversold conditions. An oversold reading can sometimes precede a short-term recovery, but it does not by itself confirm that prices have reached a bottom.
Ponmudi said the widening negative MACD histogram suggested that selling pressure had yet to ease. Traders may therefore look for clearer signs of stabilisation before treating any recovery as a sustained reversal.
Will festive demand support bullion prices?
The latest correction comes ahead of Dhanteras and the wider festive buying period, when gold and silver purchases traditionally receive a boost in India.
The decline in prices could attract buyers who had been waiting for a more favourable entry point. However, festive demand does not necessarily guarantee an immediate recovery in market prices, particularly when international factors are exerting strong influence.
For gold, the direction of US interest rates, movements in the dollar and the rupee, and global investor sentiment will remain important. Silver could continue to see relatively sharper price swings given its exposure to both investment demand and industrial expectations.
The technical levels highlighted by Enrich Money provide traders with key support and resistance zones to monitor. However, these are market assessments rather than guaranteed price targets.
With gold trading below Rs 1.40 lakh and silver slipping under Rs 1.80 lakh, the coming sessions will be important in determining whether the metals stabilise ahead of Dhanteras or face further selling pressure. Buyers and investors will be watching both domestic price movements and developments in international markets before making their decisions.