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Tezzbuzz Desk- Heavy fall in gold and silver on MCX, investors advised to be cautious, know what are the major reasons for the fall

There was a sharp fall in the prices of gold and silver in the Indian futures market on June 24. Gold futures on the Multi Commodity Exchange (MCX) fell 1.21 per cent to around ₹1,44,759 per 10 grams. At the same time, a decline of 0.71 percent was also recorded in silver futures. With this fall, gold has reached its lowest level in seven months.

Gold under pressure due to dollar strength

The biggest reason for the fall in gold prices is said to be the strengthening of the US dollar. The dollar index has reached a one-year high of 101.52. Since the price of gold in the international market is fixed in dollars, when the dollar strengthens, gold becomes expensive in other currencies, which affects the demand.

Expectation of Fed’s strict policy became the reason

At present, expectations of the US Federal Reserve’s strict policy regarding interest rates have increased in the market. Investors fear that the Fed may keep interest rates high or increase them further, making investing in gold less attractive.

According to experts, the Fed’s tough stance and strong US economic data have increased the pressure on the precious metals.

Impact of decline in tech stocks also

According to some reports, due to the fall in American technology stocks, investors have increased the selling of gold to compensate for the losses in their portfolio. Due to this, additional pressure has been seen on gold prices.

Where is support and resistance being found?

According to experts, the important support levels for gold on MCX are said to be ₹ 1,45,200 and ₹ 1,44,000, while the resistance is at ₹ 1,47,200 and ₹ 1,48,100.

Support for silver is at ₹2,21,000 and ₹2,16,600, while resistance is at ₹2,28,800 and ₹2,31,200.

Warning for investors

Experts say that unless gold crosses the resistance zone of ₹1,51,000-₹1,53,000, it may remain under pressure. If prices go below ₹1,45,500, the decline may intensify further towards ₹1,40,000.

Where is the market looking ahead?

Now the market’s eyes are on US economic data and the further monetary policy of the Federal Reserve. The upcoming PCE (Personal Consumption Expenditure) data will indicate which direction the Fed will take its interest rate policy.

There is pressure on gold and silver due to the strength of the dollar and expectations of strict Fed policy. In such a situation, investors are being advised to adopt a cautious approach at present.