Gold Price Today: Weak dollar, US economic data support precious metal prices; resistance for gold at Rs 48,800

Gold was trading flat in the international market on December 17 amid weakness in the dollar index and rising unemployment claims in the US.

Gold contracts in India were flat with a marginal gain of 0.29 percent, trading at Rs 48,785 at 9:40 am on the Multi Commodity Exchange. Silver futures were also flat with a marginal decline of 0.11 percent at Rs 62,083 per kilogram.

Both the precious metals on December 16 settled on a positive note in the domestic market. Gold February futures contract closed at 48,646 per 10 gram with gain of 1.16% and silver March futures contract closed the day at 62,151 per one kilogram with a gain of 3.23%.

“Gold and Silver prices on December 16 soared more than 1% and 3%, respectively, as they were oversold and the market has discounted bond tapering news announced by the Fed,” said Abhishek Chauhan, Head of Commodity & Currency, Swastika Investmart.

The European Central Bank is also ready to reduce its bond buying under the pandemic emergency purchase program while it will continue to buy its long-running bond-buying under its assets purchase program.

“ECB monetary policy accelerated gold and silver prices as the dollar index slipped 0.43% in the previous trading session,” said Chauhan. On the MCX, gold has a resistance at Rs 48,700, and above this level it may move towards Rs 49,100. It has support at Rs 48,400.

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Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver gained amid weakness in the dollar index and rising unemployment claims in the US. Gold February futures contract settled at $1,798.20 per troy ounce with a gain of 1.90% and silver March futures contract settled at $22.49 per troy ounce with a gain of 4.33%.

The dollar index plunged after the Fed Open Market Committee left interest rates unchanged in its policy meeting and the Bank of England raised interest rates by 15 basis points.

US unemployment claims rose to 2,06,000 from the previous week's 1,84,000. Industrial production data was also disappointing, it showed a growth of 0.5% in the month of November against 1.6% growth in October.

Gold and silver also gained amid rising coronavirus cases in the UK and other countries, and the strength in crude oil prices. We expect both the precious metals to remain firm, and gold prices could cross $1,800 per troy ounce levels in today’s session. Gold has support at $1,784-1,772 per troy ounce and resistance at $1,810-1,822 per troy ounce. Silver has support at $22.20-21.84 per troy ounce and resistance at $22.80-23.10 per troy ounce.

On the MCX, gold has support at 48,400-48,180 and resistance at 48,800-49,050; and silver has support at 61,660-61,220 and resistance at 62,660-63,300.

We suggest buying gold on dips around 48,400 with a stop loss of 48,180 for a target of 48,800, and silver around 61,600 with a stop loss of 60,900 for a target of 63,000.

Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities

COMEX gold trades marginally higher near $1,800/oz after a sharp 1.9% gain yesterday. Gold witnessed a sharp rebound from 2-month as US dollar index and bond yields weakened in reaction to Fed decision, mixed economic data and hawkish stance of other central banks. The increasing emphasis on controlling inflation has also increased gold’s appeal as an inflation hedge. ETF flows however show lack of investor interest. Gold has rallied sharply, and a break above $1,800/oz shows upward momentum. However, the gains may be limited amid hawkish stance of Fed and major central banks.

Ravi Singh, Vice President & Head of Research, ShareIndia

Although the Fed sounded optimistic about US economic growth, the data is not supporting this optimism. US economic data continues to be disappointing as preliminary estimates show slowing activity in both the manufacturing and service sectors. The report said that activity in the manufacturing sector is at a one-year low.

Buy zone near – 48,300 for the target of 48,500; Sell zone below – 48,200 for the target of 48,000.