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Spot gold dropped about 0.5% on Thursday, extending a brutal sell-off that’s wiped nearly 6% off prices in just two sessions. Yet on the MCX, gold futures for December were trading about 2% higher at Rs 124,100 while silver futures climbed 2% to Rs 148,474—a stark contrast that underscores rupee weakness and lingering festive demand. The exodus from global markets is real: Wednesday saw the biggest single-day outflow from gold-backed exchange-traded funds in five months, according to Bloomberg data.
“After an overstretched rally, gold is behaving like an elastic band that’s been pulled too far and is now snapping back hard,” said Hebe Chen, an analyst at brokerage Vantage Global Prime. “Prices holding firm above the $4,000 mark point to a technical reset rather than a fundamental shift, with safe-haven demand and the ‘debasement trade’ still very much intact.”
The technical picture looks ominous. Gold witnessed a sharp decline of about 8% from its recent peak, marking a potential trend reversal after reaching historically overbought levels, according to Tejas Shigrekar, Chief Technical Research Analyst, Commodities and Currencies at Angel One. Monday’s close recorded the highest monthly Relative Strength Index ever observed, indicating exhaustion in the bullish momentum and setting the stage for a corrective phase.
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“Technical indicators across Gold ETFs, Spot, and Futures markets now reflect clear signs of reversal, with price action shifting from bullish to bearish,” Shigrekar said. “We anticipate further downside into November and December, particularly as seasonal demand tapers off following the festive period.”The timing couldn’t be worse for bulls. With the festive season nearing its end and demand softening, traders have begun increasing their exposure to put options, positioning for continued weakness in the coming months.Investors are also weighing the prospects for a US–China trade deal to relieve some of the geopolitical tensions that have bolstered demand for haven assets like gold. US President Donald Trump on Tuesday predicted an upcoming meeting with Chinese President Xi Jinping would yield a “good deal” on trade – while also conceding that the talks may not happen.
“Gold and silver prices stabilised around $4,050 and $48 per ounce after a sharp correction in the last two sessions as investors booked profits from Monday record highs,” said Rahul Kalantri, VP Commodities at Mehta Equities. “The pullback reflected a shift toward risk assets amid optimism over US–India trade relations, weakening gold’s safe-haven demand. Seasonal demand in India also eased, putting pressure on physical markets.”
Still, it’s not all doom and gloom. The metal is still up about 55% this year, with prices also supported in recent weeks by bets the Federal Reserve will make at least one quarter-point cut by the end of the year. Investors now await Friday’s US CPI report for new insights into the Fed’s policy outlook.
Key Levels to Watch
At the international level, gold priced at $4,080 is expected to find support between $3,800 and $3,670, with resistance near $4,190. A sustained move above $4,260 could invalidate the bearish outlook.
Domestically, Gold MCX at Rs 128,270 shows support at Rs 121,000 and Rs 115,000, while resistance is expected around Rs 130,200. A breakout above Rs 132,000–Rs 134,500 would be required to re-establish bullish momentum.
Kalantri sees gold support at $4,020–3,975 with resistance at $4,125–4,170. Silver has support at $47.85–47.40 while resistance is at $48.75–49.30. In INR, gold has support at Rs 1,21,070–1,20,580 while resistance at Rs 1,22,350–1,23,000. Silver has support at Rs 1,44,350–1,43,450 while resistance at Rs 1,46,850–1,47,780.
