Gold, silver prices ahead of wedding season: Down over 4% this week - Investors guide before US Fed Dec meeting

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Gold and silver futures recovered slightly on Friday but posted steep weekly losses as hotter US inflation, a stronger dollar and rising bond yields heightened expectations of a Fed rate hike. Analysts see near-term pressure, while Indian wedding demand and central-bank buying may cushion gold.

Gold and silver prices have taken a sharp knock, offering some relief to buyers ahead of India's wedding season. However, the recent correction in precious metals has also raised concerns about whether the sell-off has further room to run, particularly as hotter-than-expected US inflation strengthens expectations of another Federal Reserve rate hike.

On the Multi Commodity Exchange (MCX), gold futures for December delivery ended Friday higher by ₹525, or 0.39%, at ₹1,36,750 per 10 grams. Silver contracts also recovered, gaining ₹234, or 0.13%, to ₹1,76,543 per kg.

Despite Friday's recovery, both metals remained sharply lower for the week. MCX gold declined around 4.6%, while silver fell nearly 5%, reflecting pressure from a stronger US dollar, rising bond yields and concerns over the US interest-rate outlook.

Gold witnessed its steepest fall on Thursday, when prices dropped nearly 3% to a year-to-date low and their weakest level in more than a year. Bargain buying helped the yellow metal recover some losses in the following session. Silver tracked gold's decline but experienced sharper price swings, reflecting its higher volatility.

The sell-off followed the hotter-than-expected US inflation reading for October. The producer price index (PPI) rose 6.5% year-on-year, while the latest inflation data strengthened expectations of a December rate hike. Higher interest rates tend to weigh on non-yielding assets such as gold and silver by making interest-bearing investments more attractive.

Ponmudi R, CEO of Enrich Money, said MCX gold ended the week with a negative bias, closing near ₹1,36,705 after breaking below the ₹1,37,500– ₹1,38,300 support zone. This range has now turned into a resistance area.

According to Ponmudi, immediate resistance is placed at ₹1,37,500– ₹1,38,300, followed by ₹1,40,000– ₹1,41,000. A sustained move above these levels would be necessary to signal a recovery.

On the downside, ₹1,35,066– ₹1,34,000 is the immediate support zone.

Ponmudi added that the…

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