Indian Gold MCX December Futures fell marginally on Monday despite a positive trend seen in the international spot prices, but experts feel that investors will be better off buying the dip.
Experts are of the view that any dip in the precious metal could be used as a buying opportunity for a target of Rs 50,800-51000 on Gold, and Rs 62000 on silver.
On the Multi-Commodity Exchange (MCX), December gold contracts were trading lower by 0.11 percent at Rs 50,489 per 10 gram at 0920 hours. December silver futures were trading 0.19 percent higher at Rs 61,653 per kg.
Gold and silver settled on a weaker note last week. Gold settled at $1902.80 per troy ounce with a weekly loss of 1.7 percent and silver settled at $24.285 per troy ounce with a weekly loss of more than 4 percent.
Despite some weakness in the rupee both the precious metals also settled on a weaker note in the domestic market. Gold settled at 50547 per 10 gram while silver settled at 61676 per one kilogram.
The dollar index showed positive moves last week amid uncertainty in the US stimulus and upbeat US PPI, CPI and retail sales data.
“We expect both the precious metals remain volatile this week amid high volatility in the dollar index, uncertainty on US Presidential elections and talks on US stimulus. Gold is expected to hold key support of $1872 per troy ounce on a weekly closing basis and silver is also expected to hold $23.20 per troy ounce on a weekly closing basis,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“At MCX, gold is expected to hold key support of 49800 per 10 gram on a weekly closing basis and silver is expected to hold 59500 per one kilogram on a weekly closing basis. We suggest to buy in both the precious metals on the decline in the prices,” he said.
Jain further added that at MCX, gold is having support at 50300-50100 levels and resistance at 50800-50920 levels and silver is having support at 61000-60500 levels and resistance at 62300-63000 level in today's session.
Trading strategy
Sriram Iyer, Senior Research Analyst at Reliance Securities
International bullion prices ended weak on Friday and ended weak for the first time in three weeks as fading chances of a U.S. stimulus agreement before the Nov. 3 presidential election dented the metal's appeal as an inflation hedge.
Democrats and Republicans seemed unlikely to agree on a U.S. stimulus deal before Election Day even as coronavirus cases continue to rise and a labour market recovery stalls.
Domestic bullion could trade flat this Monday morning, tracking a subdued start in the overseas prices. Technically, MCX Gold December contract is trading above 65-Days Moving Average where if it sustains above 50700 could see a bounce up to 51050-51300 levels whereas support is at 50500-50250 levels.
MCX Silver December holds a support near 61300 levels above which will continue its sideways to marginal upside momentum up to 62200-63000 levels.
Hareesh V, Head of Commodity research, Geojit Financial Services.
Gold 19. Oct. 2020
Weak US dollar, expectations of more fiscal stimulus measures from the US before election and unsolved US – China tensions continue to support the yellow metal. However, easing safe haven demand amid hopes of global economic recovery would dent major rallies in the commodity.
Technical Outlook (London spot): If the support of $1840 remains undisturbed, expect rallies to continue, but it is required to break $1920 to continue major rallies. An unexpected drop below $1820 would extend further selling pressure.
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.
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