Gold, silver outlook: Key support, resistance levels; triggers to watch

Gold and silver prices remained largely range-bound on Tuesday, October 6, as investors continued to track US interest-rate expectations, the dollar and bond yields for cues on the next move.

As of 9:30 AM, MCX gold futures for December delivery were trading around ₹1,49,212 per 10 grams, marginally lower, while MCX silver futures stood at around ₹2,25,632 per kg, also marginally lower. In the international market, gold was around $4,154.65 per ounce, while silver was near $60.99 per ounce, with both metals seeing limited movement.

After profit booking at higher levels last week, the precious metals market is now looking for fresh triggers. Expectations of an immediate US rate hike have also eased, while movements in the dollar and bond yields remain important for bullion prices.

Gold and silver remain range-bound

According to Anuj Gupta, Research Analyst, gold and silver are currently trading in a range, with the market looking for fresh direction from upcoming US monetary-policy cues.

The next FOMC meeting is scheduled for October 27-28.

“If we talk about gold and silver, both precious metals are currently trading in a range. Gold is around the $4,130 level, while silver is trading near $60.80. In the domestic market, gold is around ₹1,49,300 and silver is close to ₹2,26,000”, he said.

Gupta said the market has seen profit booking at higher levels, which has kept prices under pressure in the near term.

“Last week, we saw profit booking at higher levels in both gold and silver. So, at present, the market is consolidating and trading within a range rather than showing a clear directional move”, he said.

Rate-hike expectations fall

One of the key factors being watched by bullion traders is the outlook for US interest rates. Gupta pointed out that expectations of a rate hike have come down sharply.

“At present, the expectation of a US rate hike is around 23%. This is much lower, and that is an important factor for gold and silver because lower rate-hike expectations can provide some support to precious metals”, Gupta said.

The market is now awaiting the US Federal Reserve's meeting minutes, which could provide further clarity on the central bank's monetary-policy stance.

Dollar remains a key trigger

Gupta also highlighted the movement in the US dollar index as an important factor for precious metals.

“The dollar index had moved above 102, but now it has come below 102 and we are seeing some profit booking in the dollar. If the dollar remains under pressure, that can be supportive for gold and silver”, Gupta said.

He added that bond yields will also remain an important factor in determining the direction of bullion prices. “Bond yields are currently stable, and if we see buying emerging at lower levels, gold and silver can get some support from there”, Gupta added.

Gold: key levels to watch
On gold, Gupta identified important support and resistance levels in the international as well as domestic market.

“For international gold, $4,110 and $4,080 are important support levels, while $4,160 and $4,190 are the key resistance levels. For the domestic market, he said traders should keep an eye on the ₹1.48 lakh-₹1.47 lakh zone on the downside”, Gupta said. “In MCX gold, ₹1,48,500 and ₹1,47,700 are important support levels. On the upside, ₹1,50,000 and ₹1,50,800 will act as important resistance levels”, he added.

Silver: key levels in focus

Silver is also trading in a relatively narrow range, with Gupta highlighting key levels that could determine the next move.

"In international silver, $60 and $58 are important support levels, while $63 and $65 are the major resistance levels to watch", Gupta said.

For MCX silver, Gupta expects the ₹2.22 lakh and ₹2.18 lakh levels to act as important supports. “In domestic silver, ₹2,22,000 and ₹2,18,000 are important support levels. On the upside, ₹2,28,000 and ₹2,32,000 are the levels to watch", he said.

With precious metals currently range-bound, the next major question for traders is whether lower levels attract fresh buying or whether profit booking continues.

For now, the key triggers remain the US Fed's policy signals, the dollar's movement and bond yields- all of which could determine gold and silver's next big move