Gold Prices Today: Book long positions, wait for fresh buying on good correction

Gold prices were flat on November 11 after a surge in US consumer prices drove the metal, seen as an inflation hedge, to a five-month peak in the previous session.

Bullion’s gains came despite the dollar holding close to its highest in over a year. A stronger dollar reduces gold’s appeal as it raises the cost of purchasing gold for buyers holding other currencies.

On the Multi-Commodity Exchange (MCX), the gold contracts were up 0.15 percent to Rs 48,926 for 10 grams at 10:00 am. Silver futures were marginally up 0.08 percent to Rs 65,931 a kilogram.

Gold and silver prices soared on November 11 as CPI MoM data rose to 0.6% ramping up the demand for a safe haven. FED has reiterated not to increase the interest rate in the near term as it assumes inflation is increasing for a short-term period. However, the dollar, which moves opposite to gold prices, also rose 0.6% yesterday on hope of a rate hike sooner than forecasted. In MCX, gold has resistance at Rs 49,400 and RSI also shows an overbought level on the hourly chart. Profit booking is expected in gold and it may test Rs 48,770 support levels, said Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart.

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US consumer prices jumped 6.2% on an annual basis in October – the highest since 1990. On account of the data, gold jumped nearly $40 in Comex and touched the level of Rs 49,000 on MCX. Fed Officials already quoted that if inflation keeps rising at its current pace then a more aggressive policy response may be adopted. Taking cue from this, gold prices have recovered it's losses and are expected to remain in the same trend for a few more days.

Buy zone around - Rs 48,800 for target of Rs 49,300

Sell zone below - Rs 48,600 for target of Rs 48,300

Gold December contract surged to a new high of Rs 49,280 on MCX on November 9. Although this was fuelled by an unexpectedly bigger inflation number in US & subsequent worry of rising interest rate, yet it was in line with the intermediate uptrend, which we had conveyed earlier. Gold was actually getting stronger once it surpassed the August high of Rs 47,900 and its primary downtrend had exhausted clearly. This previous resistance level is now likely to act as support for gold.

From the season's perspective as well, gold is entering into a bullish phase as the months of December and January are traditionally bullish. Gold has always risen in December and also in four out of the last five years, the yellow metal has risen in the month of January.

Yesterday we saw solid buying in Bullions at lower levels, both metals are continuously rising since the last 5 trading sessions. As per technical chart at current prices, both metals are looking risky for fresh buying, momentum indicator RSI is also indicating the same on the daily chart. Traders are advised to book their longs and should wait for fresh buying on good correction. Traders should focus on important technical levels.

December Gold closing price Rs 48,854, Support 1 - Rs 48,500, Support 2 - Rs 48,200, Resistance 1 - Rs 49,160, Resistance 2 - Rs 49,500.

December Silver closing price Rs 65,878, Support 1 - Rs 65,200, Support 2 - Rs 64,400, Resistance 1 - Rs 66,600, Resistance 2 - Rs 67,270.

Gold and silver skyrocketed on November 11 after upbeat US inflation data. Both the precious metals settled on a positive note in the international markets. Gold has support at $1832-1818 per troy ounce and resistance at $1862-1878 per troy ounce while silver has support at $24.50-24.30 per troy ounce and resistance at $25.00-25.20 per troy ounce.

At MCX, gold has support at 48660-48480 and resistance at 49100-49300 while silver has support at Rs 65,220-64,800 and resistance at Rs 66,300-66,700 levels. We suggest buying gold on dips around Rs 48,700 with a stop loss of Rs 48,440 for the target of Rs 49,200 and silver around Rs 65,400 with a stop loss of Rs 64,700 for target of Rs 66,600.