Gold, Silver Fall as Crude Oil Rises on West Asia Tensions

Rising Crude Oil Prices Weigh on Gold and Silver Amid West Asia Tensions

As geopolitical tensions escalate in West Asia, precious metals face downward pressure, with gold and silver extending their losses as crude oil prices surge.

Gold Prices Decline Significantly

On October 22, gold futures opened lower on the Multi Commodity Exchange (MCX), with the benchmark December contract starting at ₹1,44,992 per 10 grams, down ₹1,087 from the previous close of ₹1,46,079. As trading progressed, the price further dipped to ₹1,44,593, marking a decline of ₹1,486. Earlier this year, gold had peaked at ₹1,80,779 per 10 grams, highlighting the significant downturn in recent months.

Silver Prices Follow Suit

Silver futures also experienced a notable decline, opening at ₹2,06,000 per kg, down ₹3,168 from the previous close of ₹2,09,168. The price continued to fall, trading at ₹2,04,804, a decrease of ₹4,364. Earlier this year, silver had reached a high of ₹4,20,048 per kg, indicating a substantial drop in value.

Global Market Trends

In the global market, gold futures on Comex opened at $4,159 per ounce, but were trading at $4,110.30, down $39.70. Similarly, silver futures opened at $58.09 per ounce and were trading at $56.45, down $1.26. Earlier this year, gold had peaked at $5,586.20 per ounce, while silver reached $121.79 per ounce, showcasing the volatility in the precious metals market.

Technical Analysis and Market Sentiment

Ajay Kedia, director of Kedia Advisory, noted that gold is currently experiencing long unwinding, with open interest declining by 1.38% to 16,597 contracts. The technical analysis indicates support levels at ₹1,45,560 and ₹1,45,040, while resistance is noted at ₹1,46,570. Given the current price of ₹1,44,593, gold is already below these support levels, suggesting a bearish outlook.

For silver, Kedia pointed out fresh selling pressure, with open interest rising by 1.87% to 19,888 contracts. The support levels for silver are cited at ₹2,08,170 and ₹2,07,170, with resistance at ₹2,10,520. The current price of ₹2,04,804 is also below these support levels, indicating a challenging environment for silver prices.

Key Highlights

• Gold futures on MCX fell to ₹1,44,593 per 10 grams, down ₹1,486.
• Silver futures traded at ₹2,04,804 per kg, a decline of ₹4,364.
• Crude oil prices surged to nearly $98 per barrel amid geopolitical tensions.
• Gold and silver prices are facing downward pressure due to rising inflation concerns.
• Technical indicators suggest bearish sentiment for both gold and silver.

Investor Note: The recent rise in crude oil prices, coupled with geopolitical tensions, poses significant risks for gold and silver investors. As both metals trade below critical support levels, investors should remain cautious and monitor market developments closely.