Gold was trading higher in India on December 6 morning even as prices were little changed in the international market after falling more than 1.5 percent in the previous session.
At 10.04 am, gold contracts were trading 0.4 percent higher on the Multi Commodity Exchange (MCX) at Rs 53,721 for 10 grams. Silver added 0.64 percent at Rs 65,600 a kilogram.
Spot gold was flat at $1,768.61 a troy ounce. Bullion hit a five-month high on December 5 before closing 1.6 percent lower in its biggest daily drop since September 23, as the dollar rebounded on bets that strong economic data may prompt bigger interest rate hikes by the Federal Reserve.
US gold futures were flat at $1,780.90.
Trading Strategy
Rahul Kalantri, VP-Commodities, Mehta Equities
Gold and silver traded sharply lower in evening trades on December 5 after hitting multi-month highs in the morning session. Metal prices were hit by heavy profit-taking from the shorter-term futures traders and bearish markets.
Gold has support at $1,764-1,754, while resistance is at $1,788-1,795. Silver has support at $22.20-21.96, while resistance is at $22.68-22.81. In rupee terms, gold has support at Rs 53,280-52,950, while resistance is at Rs 53,650, 53,880. Silver has support at Rs 64,550-63,980, while resistance is at Rs 65,820–66,440.
Nirpendra Yadav, Senior Research Analyst, Swastika Investmart
Precious metals prices retreated from a three-month high as the US benchmark treasury yield bounced from lower levels supporting the dollar index.
US ISM service PMI rose to 56.5 while it was 53.5 earlier. The US factory orders stood at 1.0 percent versus 0.3 percent in the previous month, indicating growth in the economy.
On December 6, bullion is expected to remain range bound. Any rise in prices may witness selling pressure. Gold has resistance at Rs 54,000 and support at Rs 53,400. Silver has resistance at Rs 66,400 and support at Rs 64,400.
Manoj Kumar Jain, Prithvi Finmart Commodity Research
On December 5, gold and silver settled on a weaker note in the international market. The February gold futures contract settled at $1,781.30, down 1.66 percent, and the March silver futures contract settled at $22.42 a troy ounce, down 4.02 percent. Domestic markets also ended weaker.
We expect both precious metals to remain volatile in on December 6 and to find support at lower levels. Gold has support at $1,768-1,750, while resistance is at $1,796-1,810. Silver has support at $22.10-21.84 and resistance at $22.74-23.
On MCX, gold has support at Rs 53,330-53,100 and resistance at Rs 53,740-53,950, while silver has support at Rs 64,750-64,100 and resistance at Rs 65,800-66,300.
We suggest buying silver on dips at around Rs 64,800 with a stop loss of Rs 64,300 for a target of Rs 65,800.
Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One
On December 5, the yellow metal slipped lower, witnessing a pause in the strong momentum seen over the last few sessions. Bullion concluded the day with a 1.64 percent cut at 1768.4$. The pullback came as the dollar rebounded on bets that strong economic data may prompt bigger interest rate hikes by the Federal Reserve.
In the US, the services industry activity unexpectedly picked up in November, prompting speculation the Fed may lift interest rates more than recently projected.
Higher interest rates tend to reduce the appeal of gold as they increase the opportunity cost of holding the non-yielding metal.
The European Central Bank is anticipated to increase interest rates by 50 basis points the following week. We expect gold to trade lower towards Rs 53,220, a break of which could prompt the price to move lower to Rs 53,010.
(With agency inputs)
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