Precious Metals Plunge: Gold and Silver ETFs Face Steep Selloff as Global Markets Brace for Fed Signals

Precious Metals Plunge: Gold and Silver ETFs Face Steep Selloff as Global Markets Brace for Fed Signals​

Precious metal trading saw a consistent slide on Friday, with both gold and silver futures experiencing significant selling pressure. This weakness comes as precious metals continue a trend of declining prices. The bullion markets were weighed down by strength in the US dollar and hawkish signals emanating from the Federal Reserve.

Precious Metals Face Selloff Amid Strong Dollar Trend​

Spot gold experienced a notable dip, trading at $4,121.95 per ounce, which registered a 2.1% decline as of 0508 GMT. This drop marks its lowest level since June 11. The contract for gold was down 3.8% so far this week.

The rise in the US dollar made precious metals more expensive for those holding other currencies, according to reports. Markets activity was limited on Friday due to closure of mainland China and Hong Kong markets for the Dragon Boat Festival holiday.

MCX Futures Trading Highlights: Gold and Silver Slide​

On commodity exchanges (MCX), silver futures traded significantly lower. Silver July futures were down by nearly 3%, or about Rs 7,000, resting at Rs 2.3 lakh per kg.

Gold August futures also saw a clear downturn, falling around Rs 2,750, or almost 2%, reaching Rs 1.46 lakh per 10 grams. The decline in raw metal prices translated into sharp drops across various Exchange Traded Funds (ETFs).

Impact on Precious Metal ETFs​

Silver ETFs collectively faced heavy selling pressure. Nippon Silver ETF fell 5.41% to Rs 217.54, while ICICI Pru Silver ETF declined 5.50% to Rs 227.15. HDFC Silver ETF dropped 5.49% to Rs 217.27, and SBI Silver ETF slipped 5.40% to Rs 222.66. Tata Silver ETF registered a loss of 5.36%, closing at Rs 22.09.

Gold ETFs also recorded declines. Nippon Gold ETF fell 2.64% to Rs 118.89, with ICICI Pru Gold ETF declining 2.77% to Rs 122.89. SBI Gold ETF shed 2.72% to Rs 122.53, while HDFC Gold ETF dropped 2.59% to Rs 122.83. Kotak Gold ETF lost 2.88%, trading at Rs 119.60.

Analyst View: Trend and Key Support Zones​

Kaveri More, Commodity Analyst at Choice Broking, noted that MCX gold prices have declined by over 4% across the last two sessions, pointing to a moderately bearish short-term trend. The metal is currently nearing crucial support zones located between Rs 144,700 and Rs 142,700. Immediate resistance levels are set between Rs 149,300 and Rs 152,000.

In the international market, COMEX Gold has defined a key positional support zone between $4,020 and $3,885, which will be critical in determining future major price direction.

Silver's Resilience and Market Outlook​

Regarding silver, More stated that MCX Silver has maintained its downward momentum for the fourth consecutive week, opening with a near 2% gap-down on Friday and remaining firmly in bearish territory. Key support levels are identified between Rs 223,100 and Rs 219,600. Resistance is located at Rs 242,200 to Rs 246,800. She added that silver has shown better resilience compared to gold, indicating a degree of outperformance despite the recent correction.

Crude Oil Trend Analysis and Outlook​

On another market note, MCX Crude Oil opened with a gap-up of around 1.3% on Friday, suggesting a moderate short-term recovery. However, the broader positional trend remains bearish, which means upside may be limited in the near term. Immediate support for crude oil is placed at Rs 7,020 to Rs 6,890. Resistance has been set between Rs 7,200 and Rs 7,320. A sustained movement above these resistance levels would be necessary to improve overall market sentiment.