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Gold price today: Indian futures rise as global prices climb to 9-year high

Gold and silver prices remain firm and further stimulus talks from developed economies and weakness in dollar index will continue to support prices.
Jul 22, 2020 / 09:42 AM IST

India Gold August Futures rose on July 22 tracking positive momentum in the international spot prices which rose highest in nearly nine years, driven by a weaker dollar and as expectations of more stimulus measures from the pandemic-hit economies.

Spot gold was trading at $1,857.86 per ounce, after hitting its highest since September 2011 at $1,865.35 earlier in the session. U.S. gold futures rose 0.8% to $1,858.20, said a Reuters report.

European Union leaders on Tuesday sealed a 750 billion euro recovery plan, while White House officials and top congressional Democrats discussed the next round of relief that would include extended unemployment insurance and more money for schools, added the report.

On the Multi-Commodity Exchange (MCX), August gold contracts were trading higher by 0.88 percent at Rs 49,963 per 10 gram at 0920 hours. September futures for silver were trading 5 percent higher at Rs 60,306 per kg.

Experts are of the view that investors should hold on to a long position in both the precious metals as the momentum is on the upside. The crucial support for the yellow metal is placed at 49220-49,000, they say.

Gold and silver blasts on Tuesday as the yellow metal gained more than 1 percent and silver hit 6 percent upper circuit. Gold prices crossed crucial resistance of $1832 per troy ounce on a closing basis and silver also surpassed $21.20 per troy ounce on a closing basis.

The Dollar index plunged on Tuesday and slipped below 95.50 levels which acted as a support for both the precious metals. Gold and silver prices remain firm and further stimulus talks from developed economies and weakness in dollar index will continue to support prices, suggest experts.

“Gold and silver are in limelight after rising coronavirus cases, geo-political tensions and gains to Former vice President Biden against President Trump in the primary electoral survey,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.

“Biden is having around 15% leads in the primary survey against President Trump. As expected silver is outperforming gold and gained more than 6%. We have already updated in our earlier note that silver will test $23 per troy ounce,” he said.

Jain further added that at MCX, gold prices sustain above 49500 could extend the gains towards 49770-49920 levels, 49220 act as a major support on a closing basis.

“Silver prices sustain above $21.70 could extend the gains towards $22.50-23.20 per troy ounce, $21.20 act as a major support on a closing basis. At MCX, silver sustain above $57700 could extend the gains towards 58800-60000 levels, 56500 act as a major support on a closing basis,” he said.

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Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities

International bullion surged higher on Tuesday supported by the EU stimulus deal and weak US Dollar. Bullion prices also drew support from expectations that U.S. lawmakers could soon agree on a new stimulus package, as extended unemployment aid for millions of Americans will expire at month-end.

International bullion prices have started higher this Wednesday morning in Asian trade propelled by a softer U.S. dollar and expectation of more stimulus measures to resuscitate pandemic-hit economies.

Technically, the MCX Gold August contract had a volatile session in the range of 49036-49579 levels where it gave a breakout of all-time high level 49348.

Moreover, it ended above 49500 levels indicating volatility to continue above these levels. Resistance holds at 49750-49950 level and Support is at 49300-49050 levels.

MCX Silver September made a high of 57457 levels where it has bounced back from 54802 levels and almost jump more than 6% indicating positivity to continue.

Prices are likely to trade on high volatility with upside momentum where it could trade in a range of 55050-57900 levels in the coming session.

Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities

COMEX gold trades higher by 0.8% near $1860/oz and has tested the highest level since Sept.2011. Gold remains supported by weakness in the US dollar, robust ETF buying, and hopes of additional stimulus measures.

Gold may continue to trade with a positive bias amid general weakness in the US dollar and continuing stimulus measures to boost economic recovery.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand Kshitij Anand is the Editor Markets at Moneycontrol.
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