Kamal Ghorui
Gold and silver prices continued to face heavy pressure on the MCX on Friday, with both metals opening sharply lower as weak global cues and a stronger US dollar dampened sentiment. The decline marked the second straight session of losses, undoing most of the gains made during a short-lived rebound earlier in the week amid a broader sell-off in global technology stocks.Silver futures for March 5 delivery on the MCX saw the sharpest fall, sliding 6% or Rs 14,628 to Rs 2,29,187 per kg. Gold futures for April 2 delivery also slipped, falling Rs 2,675 or 2% to trade at Rs 1,49,396 per 10 grams.Internationally, gold prices showed mixed movement. Spot gold edged up 0.4% to $4,790.80 per ounce as of 0224 GMT, though it was still down 1.4% on a weekly basis. US gold futures for April delivery declined 1.7% to $4,806.50 per ounce. Silver prices remained largely flat at $71.32 an ounce after suffering a steep 19.1% fall in the previous session. Earlier on Friday, silver had dropped as much as 10%, slipping below the $65 level to hit its lowest point in over one-and-a-half months.
Adding to the volatility, the MCX implemented further margin hikes on precious metal contracts. After raising margins on silver futures by 4.5% and on gold futures by 1% with effect from February 5, the exchange imposed an additional margin of 2.5% on silver futures and 2% on gold futures from Friday. This has taken the total additional margin requirement to 7% for silver futures and 3% for gold futures from February 6 onwards.Higher margin requirements increase the amount of capital traders need to maintain, often leading to a cutback in speculative and leveraged positions. In volatile markets, this can prompt profit booking or forced unwinding of positions, particularly in silver contracts, thereby exerting further pressure on prices or increasing intraday swings.Manoj Kumar Jain of Prithvi Finmart told ET that market participants are closely monitoring developments around the US–Iran nuclear deal talks, which could influence the direction of precious metals. He said gold and silver are currently witnessing very high price volatility. According to him, silver may find support near $65 per troy ounce, while gold could hold support around $4,440 per troy ounce on a weekly closing basis.Jain also said volatility is likely to persist during the session due to fluctuations in the dollar index, the partial shutdown in the US, and ongoing geopolitical tensions. He pegged gold’s support levels for the day at $4,770–$4,640 per troy ounce, with resistance at $4,955–$5,050, as cited by ET. For silver, support is seen between $71.20 and $64.00, while resistance lies in the $84.40–$88.80 range.On the MCX, Jain said gold has support at 150,500–147,700 and resistance at 154,200–155,800, while silver is supported at 225,000–212,000 with resistance at 254,000–264,000. He advised investors to stay away from precious metals markets until stability returns.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
