The price of gold in the Indian futures market opened flat and remained so in range-bound trading early October 13. US bond yields receded slightly lower to 1.57 percent on the back of profit taking.
The dollar index strengthened on Tuesday amid the possibility of a bond tapering by the US Federal Reserve from November. The dollar index crossed the 94.40 mark again. MCX gold December futures on Tuesday closed at Rs 47,210 per 10 grams, down 0.44 percent from an intraday high of Rs 47,420 and a low of Rs 47,036. However, the close was 0.34 percent or Rs 159 higher than at end of trade on Monday.
Manoj Kumar Jain of Prithvifinmart Commodity Research suggests, “Gold prices got support from the global uncertainty due to the energy crisis and rising inflations.” The Chinese real estate developer Evergrande missed another big debt payment and supported safe haven buying in yellow metal, he added.
MCX silver December futures closed at Rs 61,600 per kg after hitting an intraday high of Rs 62,137 per kg, a decline of about 0.9%. Silver had opened marginally higher at Rs 61,738 per kg and marked a low of Rs 61,211 per kg on Tuesday. The close was 0.23 percent or Rs 144 lower than Monday’s close.
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Experts feel that silver is struggling due to the strength in the dollar index and rising production.
“We expect both precious metals to continue to move in the upward direction due to rising inflation, Chinese firm’s debt concerns and a global energy crisis,” said Jain. The US inflation reports will come out on Wednesday and Thursday and will give further clues to the Federal Reserve’s next step on the interest rates.
According to Amit Khare, associate vice-president, research commodities, Ganganagar Commodity Ltd, “The charts of bullions are looking stronger day by day and with the ongoing Indian festive season we can see continuous buying in gold and silver.” He advises traders to create fresh long positions in gold and silver in small dips.
According to Jain, gold has support at Rs 47,000-Rs 46,770 and resistance at Rs 47,440-Rs 47,650; silver has support at Rs 61,200-Rs 60,900 and resistance at Rs 61,900-Rs 62,400. He suggests buying gold around Rs 47,050 with a stop loss of Rs 46,820 for the target of Rs 47,440 and silver around Rs 61,330 with a stop loss of Rs 60,900 for the target of Rs 62,200.
COMEX gold trades marginally higher near $1762 per ounce after a 0.2% gain Tuesday. Gold has continued to trade in a broad range near $1750/oz amid mixed factors and this may not change unless there are fresh triggers.
Ravindra Rao, vice-president and head, commodity research at Kotak Securities said, “Gold has gained support from volatility in equity markets and slowing global growth as indicated by the IMF’s (International Monetary Fund) latest economic outlook. However, weighing on gold price is a higher US dollar and bond yields amid increased expectations of the Fed’s monetary tightening.”
Rao expects gold to remain volatile amid mixed trade but with risk sentiment shaky he expects safe haven buying to support prices.“
Gold could test $1,784 per troy ounce in upcoming sessions. It is having support at $1,750-1,738 per troy ounce and resistance at $1,768-1,784 per troy ounce; silver is having support at $22.30-22.00 per troy ounce and resistance at $22.70-23.00 per troy ounce,"