Gold prices saw a mild correction in early trade on Friday, January 16, as investors booked profits after a sharp rally that pushed the yellow metal to record highs earlier this week. The decline came amid fading expectations of near-term interest rate cuts by the US Federal Reserve, a stronger dollar, and easing geopolitical tensions.
On the Multi Commodity Exchange (MCX), gold February futures were trading 0.48 per cent lower at ₹1,42,434 per 10 grams around 9:05 am. Silver prices witnessed sharper losses, with MCX silver March futures falling more than 2 per cent to ₹2,85,676 per kg.
The weakness was also reflected in global markets. US gold futures for February delivery slipped nearly half a per cent to $4,594.81, tracking the rise in the US dollar.
The immediate trigger behind the profit booking appeared to be stronger-than-expected US economic data, which boosted the greenback. The dollar index was up about 0.20 per cent for the week and looked set to extend its winning streak for a third consecutive week. For January so far, the index has gained close to one per cent.
A stronger dollar typically weighs on gold prices, as the metal becomes more expensive for investors holding other currencies, leading to subdued demand.
Expectations of early interest rate cuts by the US Federal Reserve also weakened after fresh data showed resilience in the US labour market. According to the US Labor Department, weekly initial jobless claims dropped by 9,000 to a seasonally adjusted 1,98,000, well below economists’ expectations of 2,15,000.
Although markets still anticipate at least two rate cuts later this year, recent inflation trends and labour market data suggest that the central bank may refrain from easing policy in the coming months.
Adding to the pressure on gold prices, geopolitical risks eased after US President Donald Trump indicated that he may delay any potential military action against Iran. The softer stance reduced safe-haven demand for precious metals, prompting traders to lock in profits after the recent surge.
Commenting on the market movement, Rahul Kalantri, Vice President of Commodities at Mehta Equities, said that the combination of a stronger dollar, easing geopolitical tensions, and delayed Fed rate cut expectations created near-term headwinds for gold.
According to Kalantri, gold has support at $4,520 and $4,455, while resistance is seen at $4,640 and $4,690 in international markets. Silver support lies at $86.10 and $84.75, with resistance at $92.15 and $94.40.
In the domestic market, gold has support at ₹1,42,350 and ₹1,40,310, while resistance is placed at ₹1,44,350 and ₹1,45,670. Silver support is seen at ₹2,88,810 and ₹2,84,170, while resistance levels are ₹2,94,810 and ₹2,96,470.
Gold and Silver: Key Levels to Watch
International Levels
Gold
- Support: $4,520 | $4,455
- Resistance: $4,640 | $4,690
Silver
- Support: $86.10 | $84.75
- Resistance: $92.15 | $94.40
MCX Levels (INR)
Gold
- Support: ₹1,42,350 | ₹1,40,310
- Resistance: ₹1,44,350 | ₹1,45,670
Silver
- Support: ₹2,88,810 | ₹2,84,170
- Resistance: ₹2,94,810 | ₹2,96,470
Meanwhile, Jigar Trivedi, Senior Research Analyst at Reliance Securities, said MCX gold February futures could slip towards ₹1,42,300 per 10 grams in the near term, as the overall undertone remains mildly weak due to dollar strength.
Despite the current pullback, analysts maintain that the broader outlook for gold remains positive over the medium to long term, supported by ongoing global uncertainties, central bank buying, and inflation-related risks.