Gold prices showed an upward trend in early trading on the Multi Commodity Exchange (MCX) on Friday, February 27, buoyed by strong demand in the spot market and ongoing geopolitical tensions, along with a weakening US dollar. The April futures for gold increased by approximately ₹500, or 0.30%, reaching ₹1,60,177 per 10 grams. In tandem, March silver contracts surged by more than ₹7,100, or nearly 3%, climbing to ₹2,66,800 per kg.
In the previous session, gold April futures concluded at ₹1,59,709 per 10 grams, reflecting a decline of nearly 1%, while silver March futures fell over 3% to ₹2,59,669 per kilogram.
Discussions between the US and Iran recently concluded without a definitive agreement, although mediation by Oman indicated some progress. Oman’s Foreign Minister, Sayyid Badr Albusaidi, announced on social media platform X that the two nations would reconnect for talks after further consultations in their respective capitals, with technical discussions scheduled for next week in Vienna. Nonetheless, rising tensions persist, as US Secretary of State Marco Rubio highlighted that Iran remains a “very grave threat” to the US, which continues to support an increase in the safe-haven metal demand.
Additionally, the US dollar index experienced a dip on account of reduced demand, falling from 97.82 to 97.69 after some selling activity by importers, encouraging interest in gold purchases. The latest US weekly jobless claims reported a slight increase of 4,000, totaling 212,000 for the week ending February 21. This stability in the labor market has dampened expectations regarding a potential rate cut by the US Federal Reserve.
Analysts note that market participants anticipate three 25-basis-point rate cuts from the Federal Reserve within the year, according to CME’s FedWatch Tool.
Commodity analyst Manoj Kumar Jain of Prithvifinmart Commodity Research forecasts continued volatility in the gold and silver markets throughout the day. Jain recommends purchasing gold on dips around ₹1,59,100 and ₹1,58,000, applying a stop loss below ₹1,56,500, with targets set at ₹1,60,600 and ₹1,61,800. For silver, he advises buying around ₹2,58,000 and ₹2,53,000, with a stop loss below ₹2,48,800 and targets of ₹2,62,000 and ₹2,68,000.
In terms of technical analysis, Jain identifies support levels for gold at ₹1,58,200 and ₹1,56,500, with resistance noted at ₹1,61,000 and ₹1,62,500. Silver support levels are at ₹2,55,000 and ₹2,48,800, while resistance stands at ₹2,64,600 and ₹2,71,000.
The current fluctuations in gold and silver prices demonstrate the intricate dance of market dynamics influenced by geopolitical factors and economic indicators, providing investors with opportunities amid uncertainty.