India Gold October Futures fell on August 11 tracking muted trend seen in international spot prices as US dollar firmed after Beijing slapped sanctions on US officials in the latest flare-up in tensions between Washington and Beijing.
The US dollar, an alternative safe-haven asset especially during flare-ups in tensions between the world's two biggest economies, rose to a one-week high against its rivals, said a Reuters report.
On the Multi-Commodity Exchange (MCX), October gold contracts were trading lower by 0.6 percent at Rs 54,600 per 10 gram at 09:30 hours. September futures for silver were trading 0.9 percent lower at Rs 74,702 per kg.
Experts are of the view that after a smart rally in the past few sessions some profit-booking was on cards. On the downside, crucial support for the gold is placed at Rs 54,400 levels per 10 gm.
Gold and silver gained in the international market on Monday. Gold gained around 0.50 percent and settled at $2,030.30 per troy ounce, while silver gained more than 6 percent and settled at $29.26 per troy ounce.
At MCX, Gold settled around Rs 55,000 with around 0.50 percent gains and silver settled around Rs 75,600 with around 2 percent gains.
“Precious metals are getting support from global central banks that are increasing their gold reserves and it has reached to 13 percent in the year 2020 from 9.1 percent in 2015. Global central banks are exiting from the dollar and increasing gold reserves, and that could impact dollar index in the coming days,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“Precious metals are also getting support from geopolitical tensions, record surge in coronavirus cases and fear of lower global growth. We expect both the precious metals remain volatile in today's session,” he said.
Jain is of the view that at MCX, Gold has support placed at Rs 54,440 on a closing basis, if prices sustain above Rs 55,000, could extend the gains towards Rs 55,330-55,550 levels.
Trading Strategy
Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold and silver started weak this Tuesday morning in Asian trade tracking gains in the US Dollar and as investors booked some profits.
Technically, LBMA GOLD Spot traded in a range of $2,019-$2,049 levels where it ended on a negative note below $2,030 levels. Resistance is at $2,030-$2,040 levels. Support is placed at $2,015-$2,009 levels.
Technically, the MCX Gold October contract traded in the range of Rs 54,861-55,449 levels. Moreover, it ended below Rs 55,000 levels indicating volatility to continue with downside momentum in the coming sessions. Resistance holds at Rs 55,200-55,500 level and support is at Rs 54,700-54,200 levels.
Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities
COMEX gold December contract trades 0.5 percent lower near $2,025/oz after a 0.6 percent gain in the previous session. Weighing on gold is some recovery in the US dollar index from 2-year lows, pause in ETF buying, and some better than expected economic data from major economies.
However, supporting price is increasing US-China tensions and rising virus cases globally. Gold rallied sharply in the last few days without any major correction and this pushed it deep into overbought territory.
With the US dollar index attempting some recovery, we may see some correction in gold however it is likely to hold above the $2,000/oz level amid persisting global concerns.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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