Gold and silver prices continued their downward trend on Wednesday, dragged by a stronger US dollar and growing uncertainty over the Federal Reserve's next policy move. With investors eyeing key US economic cues, precious metals are expected to stay volatile in the near term. Spot gold slipped 0.2% to $4,059 per ounce, while US gold futures dipped to $4,061.60. Silver held steady at $50.70, but platinum and palladium saw marginal declines.

Why Are Gold and Silver Falling?

According to Dr Renisha Chainani, Head of Research at Augmont, the selloff is largely driven by fading hopes of an early US interest rate cut.

"Gold and silver are seeing steep corrections as traders wait for clues from the Fed's meeting minutes and a series of US economic data releases. This is the fourth straight day of losses as expectations of a December rate cut weaken," she explained.

The probability of a 25 bps rate cut in December has slipped sharply, from nearly 60% to 43%, as US economic updates have remained sparse and Fed officials continue to sound cautious.

Traders are now focused on Wednesday's Fed meeting minutes and Thursday's Nonfarm Payrolls report, which could set the tone for metal prices ahead.

Technical Levels: What Traders Should Track

Dr Chainani highlighted the next key support and resistance levels:

Gold

• International support: $3,950
• International resistance: $4,050
• India support: Rs 1,20,000 per 10 gm
• India resistance: Rs 1,22,000 per 10 gm

"Gold has slipped below the crucial $4,050 mark. The next downside support is at $3,950," she said.

Silver

• International support: $48.5–$47
• International resistance: $50.5
• India support: Rs 1,50,000 per kg
• India resistance: Rs 1,53,500 per kg

"Silver has breached the $50 level. The next supports lie at $48.5 and $47," she added.

What Should Investors Look for Now?

Dr Ravi Singh, Chief Research Officer at Master Capital Services, said gold's immediate movement will largely depend on upcoming US labor data and any new policy cues from the Fed.

"With gold stabilizing after a sharp fall, investors are waiting for a clear entry point. A softer jobs reading or dovish hint from the Fed could revive hopes of lower real interest rates, typically a positive trigger for gold," he noted.

However, strong jobs data or sticky inflation may extend the pressure on metals.

Central Banks Continue to Drive Long-Term Demand

Despite near-term volatility, long-term fundamentals remain strong.

"Central banks around the world have emerged as the most consistent buyers of gold," Dr Singh said. This shift, driven by reserve diversification, geopolitical uncertainty, and de-dollarisation, has created a structural boost to global gold demand.

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