Gold prices dipped in India on December 21, extending losses from the previous day despite the spread of the omicron strain of the coronavirus triggering fears of reverses in the global economic recovery.
On the Multi-Commodity Exchange (MCX), gold contracts opened lower by 0.18 percent at Rs 48,151 for 10 gram, while silver was down 0.12 percent at Rs 61,288 a kilogram. At 9.45 am, gold was trading at Rs 48,155, down 0.18 percent, and silver was down 0.20 percent at Rs 61,296.
“Gold and silver prices were lower in midday US trading Monday, as the safe-haven metals were unable to benefit from a risk-off trader and investor mentality in the marketplace to start the holiday-shortened trading week,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodity Limited.
Gold and silver witnessed profit-taking on December 20 in the international as well as domestic markets despite omicron fears and weakness in the global equity markets. The strength in the rupee also pulled the precious metals down in the Indian markets.
On December 20, the February gold futures contract on MCX settled at Rs 48,237, losing 0.73 percent after opening at Rs 48,594. March silver futures contract opened at Rs 61,901 and closed at Rs 61,417, down 1.16 percent.
A big drop in crude oil prices apparently trumped the safe-haven trade in the metals, Khare added
Trading strategy
Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver prices showed profit-taking on December 20 ahead of the Christmas and New Year holidays.
Despite weakness in the global equity markets and omicron fears, both the precious metals have been unable to catch safe-haven bids this week.
Investors are looking cautiously at the Federal Reserve governor’s hawkish statements for raising interest rates. Investors, who expect three rate hikes in 2022, booked some profits ahead of the holiday season.
However, a downgrade of US and Asian growth rates for 2022 and 2023 by rating agencies and the Asian Development Bank supported gold at lower levels.
We expect both precious metals to remain choppy ahead of the holiday trade. Gold is expected to be traded in the $1,772-1,814 range a troy ounce and silver at $21.84-22.70 a troy ounce.
Gold has support at $1,784-1,772 and resistance at $1,800-1,814. For silver, support is at $22.00-21.84 and resistance at $22.55-22.70.
On MCX, gold has support at Rs 48,100-47,920 and resistance at Rs 48,400-48,650. Silver has support at Rs 61,100-60,800 and resistance at Rs 61,700-62,220. We expect range bound trading in both metals on December 21.
Ravi Singh, Vice President & Head of Research, ShareIndia
Gold witnessed profit-booking after a massive rally. As equities are under pressure due to heavy outflow, investors are withdrawing profits from the safe-haven assets.
Buy zone above– Rs 48,400 for the target of Rs 48,600 Sell zone Below–Rs 48,100 for the target of Rs 47,900
Amit Khare, AVP- Research Commodities, Ganganagar Commodity Limited
Gold and silver showed profit booking on December 20. On MCX, February gold contracts closed 0.71 percent lower at Rs 48,240 for 10 grams. While March silver contract closed at Rs 61,417, 1.16 percent down. February gold made a high of Rs 48,643 on December 20 and then made a low of Rs 48,211. Silver made a high of Rs 61,914 and a low of Rs 61,182.
Technically, gold and silver are looking attractive in the daily chart. The momentum indicator RSI is pointing to the same on the hourly as well as daily charts.
Short-term investors are advised to create fresh longs for small dips near the given support levels. Traders should focus on these technical levels for the day:
February gold support 1–Rs 48,000, support 2–Rs 47,800, resistance 1–Rs 48,360 and resistance 2–Rs 48,500.
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