MCX December gold futures traded 0.46% lower at ₹1.42 lakh per 10 grams on Tuesday, October 27, while silver futures slipped 1.15% to ₹1.93 lakh per kilogram. The move was not a panic sell-off but a cautious recalibration. Traders are sitting on the sidelines, wary of the upcoming US Federal Reserve policy decision that could reshape the interest rate landscape. A hawkish stance or even a hold with higher-for-longer rhetoric tends to lift the US dollar, making dollar-denominated bullion pricier for international buyers and weighing on local sentiment.
The dollar factor is critical here. With the rupee hovering near ₹95 against the greenback, the import cost of bullion remains elevated even if global spot prices soften. Vikram Kasat, Chief Business Officer – Advisory and Dealing at PL Capital, noted that crude oil prices and this specific rupee-dollar dynamic are key stress points for Indian markets. India imports virtually all its gold, so any weakness in the currency directly inflates the domestic realization price, eroding consumer margins and dampening physical demand.
Technically, the market is still digesting last week’s sharp sell-off. Vikram Subburaj, CEO of Giottus.com, identified ₹1.42 lakh as the immediate support level for gold. A sustained close above ₹1.43 lakh per 10 grams would be required to signal genuine momentum, not just a bounce. For silver, the floor sits at ₹1.92 lakh per kg, with resistance at ₹1.97 lakh. Subburaj cautioned that the current recovery is modest and does not yet confirm a trend reversal. He advised investors to avoid chasing short-term spikes amid elevated volatility, noting that weak spot demand and reduced open interest are keeping the recovery fragile.
The path forward hinges on the Fed’s guidance. If the central bank signals patience on rate cuts, gold’s lack of yield becomes a liability in a high-yield environment. Conversely, any dovish surprise could trigger a relief rally. For now, the $4,000-per-ounce mark for international gold remains elusive, and silver faces additional headwinds from industrial demand concerns. Investors should watch the Fed’s statement closely and monitor whether MCX contracts can hold their identified support levels before committing capital.