Gold prices continued to fall in India on Friday as the yellow metal fell for the fourth consecutive trading session as the market remained under selling pressure and amid uncertainty about interest rates in the US.
At the MCX, gold October futures fell by ₹896, or 0.56 percent, to ₹1,58,100 per 10 grams. During the session, prices fell as much as ₹1,085, or 0.68 percent, to an intraday low of ₹1,57,911 per 10 grams.
The fall has taken the total decline in MCX gold prices over the past four trading sessions to ₹5,318, or 3.25 percent.
Gold prices fall in the world markets
Gold fell further on the international markets in advance of comments from Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium.
Spot gold weakened 0.4 percent to $4,576.30 per ounce, down 0.5 percent to $4,576.30 after the precious metal rose to a more than three-month high earlier this week. US gold was down 0.3 percent to $4,531.25 per ounce, down 0.2 percent to $4,631.
Market participants are closely listening to signals from the Federal Reserve for clues about the future path of US monetary policy. Gold prices are affected by expectations of interest rates as the precious metal does not generate interest income.
Hence, MCX Gold’s price may suffer due to the import duty status
According to Jigar Trivedi, Senior Research Analyst at IndusInd Securities, the recent fall in gold prices was mostly due to market rumours that the government could reduce the import duty on gold.
Trivedi said speculation about a possible reduction in import duty from the current 15% to 6% had contributed to selling pressure in the domestic market.
But there has been no official confirmation about any such change.
Trivedi said, “The speculative shorts have pushed gold lower on the MCX,” and that the near-term outlook is poor ahead of the Fed Chair’s speech next week.
Gold Price Technical Outlook
However, the overall technical picture for gold is still positive, they said.
Trivedi identified ₹1,58,000 and ₹1,57,800 as important support levels for MCX gold. A sustained break below these levels could indicate further weakness in the near term.
Ponmudi R, CEO of Enrich Money, said MCX gold also remains above its 20-day, 50-day, 100-day and 200-day exponential moving averages (EMAs), and so the medium-term trend is still positive.
He identified immediate resistance at ₹1,59,500–₹1,60,000, followed by ₹1,62,000–₹1,62,500.
On the downside, the immediate support is ₹1,57,600–₹1,57,000, followed by a stronger support zone at ₹1,55,500–₹1,55,000.
Ponmudi also mentioned the Relative Strength Index (RSI), which was at 60.93. While the indicator remained positive, it had moved away from the overbought region, a sign that the upward momentum of gold prices was fading.
What are gold investors going to look for in the next few days?
According to Ponmudi, the near-term bias for gold remains cautiously negative while the overall bullish structure remains intact.
Gold needs to hold the ₹1,57,000 support zone to maintain its medium-term positive structure. A sustained move above ₹1,60,000 could revive upward momentum and potentially open the way towards higher resistance levels.
On the other hand, a decisive break below ₹1,57,000 could deepen the existing correction, and prices could move towards ₹1,55,500-₹1,55,000.
For investors and traders, the upcoming comments from the US Federal Reserve Chair, developments around India’s gold import duty, and movements in global bond yields and the dollar will remain key drivers for gold prices in the near term.
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