New Delhi, March 21: Gold prices have seen a significant decline of approximately 5.89% this week, driven by ongoing profit booking and a strengthening dollar.
On the last trading day of the week, Friday, MCX Gold for April futures rose by 0.23%, reaching ₹1,44,825 per 10 grams. In contrast, MCX Silver for May futures fell by 1.72%, dropping to ₹2,27,470 per kilogram.
According to the India Bullion and Jewellers Association (IBJA), the price of 999 purity gold on Friday was ₹1,47,218 per 10 grams, a substantial decrease from Monday’s ₹1,56,436. Meanwhile, the price of 999 purity silver was ₹2,32,364 per kilogram, over ₹16,000 lower than Monday’s ₹2,48,711.
Analysts suggest that ongoing tensions in the Middle East and mixed signals related to them may continue to exert pressure on gold and silver prices in the coming week. Previously, the demand for safe-haven investments had driven prices up, but recent volatility has shaken investor confidence.
The situation escalated following Israel’s attack on Iran’s South Pars gas field, prompting Iranian retaliation and resulting in rising oil and gas prices. This scenario raises concerns about global inflation.
Additionally, the U.S. Federal Reserve, Bank of Japan, Bank of Canada, and Bank of England have adopted a hawkish stance, indicating a likelihood of rising or sustained high interest rates, which adds further pressure on precious metals like gold and silver.
Currently, MCX Gold is nearing its lower support level. Experts indicate that the resistance level is between ₹1,50,000 and ₹1,52,000, while strong support is established between ₹1,35,000 and ₹1,40,000.
Silver has also experienced a sharp decline this week, approaching the demand zone of ₹2,20,000 to ₹2,15,000. However, if buying increases, silver could potentially recover back to ₹2,40,000.
According to data released by the Reserve Bank of India on Friday, India’s gold reserves increased by $664 million to reach $130.68 billion for the week ending March 13. However, during the same week, India’s total foreign exchange reserves fell by $7.05 billion to $709.76 billion.
This decline follows an even sharper drop in the previous week, where reserves fell by $11.68 billion from $728.49 billion to $716.81 billion.
The primary reason for this decline is the central bank’s intervention in the currency market, where it sold dollars to support the rupee amid rising global oil prices and geopolitical tensions related to the Iran conflict.
Foreign currency assets, which constitute the largest portion of the reserves, decreased by $7.678 billion to $555.568 billion during the reporting week. These assets reflect the fluctuations of major global currencies such as the euro, pound, and yen against the U.S. dollar.
Arpit Soni has had a passion for journalism since the beginning. Now he has turned this hobby into his profession. Arpit, who is a resident of Udaipur, enjoys editing and writing news related to journalism. He has worked as a Senior Content Producer in several important roles at Bhaskar, Patrika, Pratahkal, Punjab Kesari, and Times. Arpit completed his schooling in Udaipur and Jaipur. He has been working in the media industry for more than 10 years, and his journey is still continuing. ✍️📚
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