Gold Prices Slide on Dollar Strength and Profit Booking

Thursday's opening for gold and silver futures was down as the US dollar approached two-week highs and 10-year Treasury yields rose again after profit-takers took some profits on today's highs. As of 9:25 am, MCX Gold February futures dropped by 0.25%, hitting ₹1,37,663 for every 10 grams, and MCX Silver March futures fell by 0.33% to reach ₹2,49,779 for every kg. The Session prior to this saw prices for gold higher, a decrease of approximately 0.7%. Silver futures suffered the greatest loss, a decrease in excess of 3%.

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Macro Headwinds Pressure Precious Metals

Higher-value dollar prices for gold will increase the price of gold while increasing the prices of 10-year bonds will increase the cost of holding gold, thus limiting the demand for gold as a safe-haven. These factors generally generate profit-taking in an overbought environment following an upward spike.

U.S. Data Mixed Signals

According to the November report from the U.S. Department of Labor, total job openings decreased to a 14-month low of 7.146 million from October's original estimate of 7.449 million. These figures suggest continuing softness in the U.S. job sector and further Fed rate reductions, which will limit the ability of gold prices to decrease. The upcoming Non-farm Payrolls report on Friday will provide additional clarification regarding the Federal Reserve's direction in 2026 with the markets anticipating that the Fed will implement at least two more interest rate cuts.

Technical Levels in Focus

Support is seen at $4,430-$4,400 per troy ounce and resistance at $4,484-$4,522. Silver price support levels are at $76.35 to $74.00 with resistance levels of $80-$82.70, forming short-term trading ranges for price movements.

Gold's 2026 Drivers

India ranks as the second-largest country globally in terms of consuming gold and sees the highest volume of consumption during the wedding season. In fact, about 40% of gold consumed in India occurs during the wedding season.
The first quarter typically reflects a general softening of demand after this festive peak. Domestic exports of gold studded jewellery are currently worth over $10B annually, which could be threatened by a potential 50% tariff on jewellery exports coming from India to the United States. 
The depreciation of the Indian Rupee offers some local price hedge against this decline, although the Indian central bank's (RBI's) market intervention has dampened short-term volatility. However, in the long term, the launch of lab-grown diamonds, such as Titan's beYon brand, could take 20% of the gold jewellery market by 2030.
The consumption patterns of gold by India consist of approximately 60% investment and 40% jewellery, providing an interest in investing in futures through the MCX and providing a daily turnover of about ₹30,000 crore on MCX, significantly reducing physical premiums and discounts paid for gold.