India Gold December futures trade lower on October 22 tracking the muted trend seen in the international spot prices as the dollar recovered from a seven-week trough and uncertainty around the US stimulus package.
Stimulus talks among US lawmakers faced a setback on October 21 when President Donald Trump accused the Democrats of being unwilling to craft a compromise on aid, despite reports of some progress earlier in the day, said a Reuters report. Gold is considered a hedge against inflation and currency debasement.
On the Multi-Commodity Exchange (MCX), December gold contracts were trading lower by 0.46 percent at Rs 51,095 per 10 gram at 0920 hours. December silver futures were trading 1.1 percent lower at Rs 62,899 per kg.
Experts are of the view that investors should wait & watch on corrections for fresh buying in both the precious metals. Crucial support for the yellow metal is placed at Rs 50,950-50,980.
Gold and silver extends gain on October 21 amid weakness in the dollar index and alive hopes for US stimulus. Gold gained for the third day in a row, while the dollar index slipped to seven weeks low on Wednesday.
Gold settled at $1929.50 per troy ounce with a gain of 0.74 percent and silver settled at 25.24 per troy ounce. Both the precious metals were also settled on a positive note in the domestic market.
The Dollar Index, tumbled for a third straight day on Wednesday, losing 0.5 percent to hit a seven-week low of 92.46 on speculation that the White House and Congress might reach an agreement on a new coronavirus relief deal.
“Hopes for a stimulus deal were kept alive on Wednesday by White House Chief of Staff Mark Meadows, who said he was very hopeful that progress is being made in the negotiations,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“We expect both the precious metals remain volatile amid volatility in the dollar index and speculation over the US stimulus deal. Gold and silver could show some profit-taking at higher levels. We suggest to wait and watch for some corrections for fresh buying in both the precious metals,” he said.
Jain further added that buying on a dip strategy will still work in both the precious metals. At MCX, gold has support at 51100-50980 and resistance at 51550-51800 levels. Silver is having support at 63100-62500 and resistance at 64200-64800 levels.
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Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold prices ended higher on Wednesday as investor optimism that a U.S. coronavirus aid package will be announced before the Nov. 3 presidential elections pressured the dollar.
International bullion prices have started with small cuts this Thursday morning in Asian trade as the U.S. Dollar rebounds after President Donald Trump accused Democrats of being unwilling to craft an acceptable compromise.
Domestic bullion could trade with small cuts this Thursday morning, tracking a negative start in the overseas prices.
Technically, MCX Gold December gave a sharp breakout above 65-Daily Moving Average around 50750 where it traded above 51300 levels indicating a positive momentum where 51450-51700 will hold resistance and support is at 51050-50950 levels.
MCX Silver December is trading in Rising Channel formation where it is sustaining above 63000 levels which signifies an upside movement up to 63700-64300 levels in coming sessions. Support is at 62800-61900 levels.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities
COMEX gold trades 0.7% lower near $1916/oz after a 0.7% gain yesterday. Gold trades mixed amid political wrangling over US stimulus. Support from rising virus cases and uneven economic recovery and lower production is countered by slack investor demand.
Gold is still stuck in the $1880-1935/oz range and we may see directionless trade unless there is clarity on US stimulus front. The general bias however remains on the upside amid increasing challenges to the global economy.Disclaimer
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