Gold and silver opened the day on a positive note on January 14, with both metals having a gap-up opening of more than Rs 100.
On Multi-Commodity Exchange (MCX) gold opened up 0.23 percent at Rs 47,841 per 10 gram and silver was up 0.17 percent at Rs 61,991 per kilogram.
At 9.50 am, gold was trading at Rs 47,896, up 0.34 percent, while silver was at Rs 62,139, up 0.35 percent.
“Gold gave up the three-day gain as Fed member Brainard showed confidence that the Fed would rein in inflation. She is also anticipating growth in the labour market with Fed's action,” said Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart.
Gold and silver showed extreme volatility on Thursday and both the precious metals gained in early trading session amid weakness in the dollar index but by the end of the day both the metals settled on a mixed note in domestic markets.
However, US producer's price index (PPI) and unemployment claims stood weaker which is supportive of gold prices. “Investors are likely to jitter over Fed members' hawkish views,” Chauhan added.
On January 13, February Gold futures contract on MCX settled at Rs 47,736 per 10 gram losing 0.15 percent after opening at Rs 47,804. March silver futures contract opened at Rs 61,868 and closed at Rs 61,920, gaining 0.10 percent.
Trading strategy
Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver showed mild profit-taking after Wednesday’s gain. Both the precious metals were settled on a slightly weaker note in the international markets. Gold February futures contract were settled at $1821.40 per troy ounce with a loss of 0.32% and silver March futures contract were settled at $23.16 per troy ounce with a loss of 0.21 percent.
Gold and silver showed extreme volatility on Thursday and both the precious metals gained in the early trading session amid weakness in the dollar index. But the dollar index recovered from the day’s low and witnessed some profit-taking in both the precious metals at higher levels.
However, unemployment claims in the United States rose again last week and supported both the precious metals. Unemployment claims in the United States rose to 2,30,000 against expected claims of 1,99,000.
On the other hand, PPI in the month of December rose 0.2 percent against 0.8 percent increase in the month of November. Lower than expected increase in the PPI is also a reason for profit-taking in both the precious metals.
We expect both the precious metals to remain volatile in today’s session and could hold support levels and any dips in the prices would be a buying opportunity at lower levels. Gold is having support at $1808-1796 per troy ounce and resistance at $1834-1845 per troy ounce while silver is having support at $22.88-22.55 per troy ounce and resistance at $23.50-23.70 per troy ounce.
At MCX, gold is having support at Rs 47,800-47,480 and resistance at Rs 47,900-48,050; silver is having support at Rs 61,660-61,200 and resistance at Rs 62,220-62,700. We suggest buying gold at around Rs 47,600 with a stop loss of Rs 47,480 for the target of Rs 47,900.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities
COMEX gold trades mixed near $1820/oz after a minor 0.3% decline yesterday. Gold trades mixed as market players assess Fed’s monetary policy stance in light of US economic data and central bank comments.
US inflation data released this week was mixed while Fed officials are supporting faster rate hikes. Support from virus concerns, geopolitical issues and concerns about Chinese economy are countered by persistent strength in equities, ETF outflows and higher yields.
Gold continues to trade within $1780-1830/oz range and this may continue unless there is more clarity on the Fed’s stance. Higher yields and stable equities may keep pressure on price.
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