Gold traded slightly lower in the Indian market on October 14 on profit taking after a rally a day earlier.
Gold contracts were down 0.20 percent to Rs 47,819 for 10 grams on the Multi-Commodity Exchange at 9.21 am. December silver futures were 0.53 percent lower at Rs 62,554 a kg.
Gold prices had jumped to a four-week high on October 13 after the US inflation report. The metal added Rs 689 to Rs 47,887 for 10 grams on profit taking in the US Dollar Index and US bond yields. It made an intra-day high of Rs 47,999 and a low of Rs 47,131 after opening at Rs 47,215.
Silver gained Rs 1,254 per kg to settle at Rs 62,480 on October 13. It touched an intra-day high of Rs 63,200 and a low of Rs 61,757 after opening at Rs 61,760.
A higher-than-expected increase in US inflation supported safe-haven buying in both the precious metals.
In the international market, gold December futures contracts settled at $1,794.70 per troy ounce with a gain of 2.01 percent, and silver December futures contracts settled at $23.17 per troy ounce with a gain of 3.02 percent.
The US Dollar Index gained after inflation data but settled on a weaker note. The benchmark 10-year bond yield also showed profit taking on October 13. The US 10-year treasury yield settled at 1.544 percent, down 0.005 from a day earlier.
Gold faces resistance at Rs 48,500 and if fails to break that level, prices may test support at Rs 47,150, said Abhishek Chauhan, head of commodity & currency at Swastika Investmart. The US Fed will not increase interest rates until 2022 and inflation is rising higher than previously expected, which supports the demand for a safe haven, Chauhan said.
Trading Strategy
Sandeep Matta, founder, TRADEIT Investment Advisor
Federal Reserve minutes from the September meeting showed central bank officials looking to start reducing their bond-buying stimulus programme as soon as mid-November or mid-December, with plans to wrap up in the middle of next year.
Gold on MCX closed near the day’s high with an almost 1,000-point rally and the bulls have gained the near-term technical advantage. We are repeatedly advising market participants to remain long in gold and are still positive on the yellow metal. The outlook for today is positive with some consolidation after this sharp rally and market participants are advised to follow key pivotal levels on both sides.
Key levels for gold December contracts – Rs 47,682
Buy zone above – Rs 47,700 for target of Rs 48,200-48,500
Sell zone below – Rs 47,650 for target of Rs 47,500-46,445
Ravi Singh, vice president & head of research, ShareIndia
The IMF cut its global growth forecast for 2021 to 5.9 percent from 6 percent in its July report, a result of a reduction in its projection for advanced economies to 5.2 percent from 5.6 percent. The shaky confidence in global economies has driven gold prices to higher levels.
Buy zone – Rs 47,700 for target of Rs 48,200
Sell zone below – Rs 47,600 for target of Rs 47,400
Amit Khare, AVP-research commodities, Ganganagar Commodity
Key technical resistance levels were penetrated on the upside in the futures markets for the metals. A selloff in the US Dollar Index also worked in favour of the precious metals market bulls. December gold futures were last up $35.90 at $1,795.00. December Comex silver was last up $0.646 at $23.16 an ounce.
Gold and silver showed strong upside movement in the October 13 trading session on the MCX. December gold contracts closed up by 1.52 percent at Rs 47,916 for 10 grams, while December contract silver futures closed at Rs 62,887 a kg, up 2.1 percent.
There has been good buying in gold and silver over the past 4-5 trading sessions. The technical charts now indicate some profit booking and the Relative Strength Index, a momentum indicator, also shows the same.
Traders are advised to book full profit on the long side and wait for fresh buying opportunities at lower levels. Important technical levels for the day:
December gold closing price Rs 47,916
Support 1 – Rs 47,650
Support 2 – Rs 47,400
Resistance 1 – Rs 48,160
Resistance 2 – Rs 48,400.
December silver closing price Rs 62,887
Support 1 – Rs 62,000
Support 2 – Rs 61,500
Resistance 1 – Rs 63,300
Resistance 2 – Rs 63,700
Manoj Kumar Jain, director, Prithvifinmart Commodity Research
Both precious metals settled on a positive note in the international markets. The focus was on the US consumer price index report for September, which came in up by 0.4 percent from August and up by 5.4 percent year-on-year. The numbers were expected to be up by 0.3 percent from August and up 5.3 percent year-on-year.
The US Federal Reserve will scrutinise inflation numbers and higher global energy prices, which fuelled inflation, before deciding on bond tapering.
Both precious metals are expected to remain volatile in today’s session but continue to find support at lower levels.
Gold has support at $1,780-1,766 per troy ounce and resistance at $1,804-1,822 per troy ounce; silver has support at $23.00-22.70 per troy ounce and resistance at $23.44-23.64 per troy ounce.
On the MCX, gold has support at Rs 47,700-Rs 47,550 and resistance at Rs 48,100-Rs 48,330.
Silver has support at Rs 62,500-Rs 62,220 and resistance at Rs 63,100-Rs 63,600.
We suggest buying in gold on dips at about Rs 47,700 with a stop-loss of Rs 47,550 for a target of Rs 48,200.
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