Gold was trading a tad low in the Indian market on October 7, as the dollar held firm with investors moving to the sidelines ahead of a US payrolls report that is expected to provide clues on the Federal Reserve’s tapering timeline.
On MCX, gold contracts were down 0.16 percent to Rs 46,832 for 10 grams at 9.30 am. December silver futures were trading marginally higher by 0.06 percent to Rs 61,040 a kilogram.
Gold was up Rs 163 to Rs 46,845 for 10 gram on October 6 on a sharp depreciation in the rupee amid subdued global trends. However, a rally in the 10-year US treasury yield and firm dollar limit the upside.
The dollar, measured against the basket of six major currencies, rose to 0.56 percent, putting pressure on precious metals.
A strong US ADP non-farm employment change data fuelled concerns of sooner than estimated tapering and increasing interest rate, Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart, said. However, falling global equity market ramped up the demand for safe haven.
“We are expecting the prices of gold may remain on the upside and it may move towards 47,300 levels. It has support at 46,700,” Chauhan said.
Trading Strategy
Sandeep Matta, Founder, TRADEIT Investment Advisor
Gold has started showing strength despite the odds and closed moderately high the previous day. Market participants are awaiting the US non-farm payroll data that will be released on October 8 and are betting positively on unknown as the numbers will shape the Federal Reserve’s plan to begin tapering.
The outlook for the day is positive and range bound consolidation is expected where $1,775 will be the key level for the precious metal to pass before the fireworks.
Key level for gold December contract–Rs 46,918
Buy zone above–Rs 46,925 for the target of Rs 47,050-47,300
Sell zone below–Rs 46,900 for the target of Rs 46,707-46,537
Ravi Singh, Vice President & Head of Research, ShareIndia
Higher US treasury yields on expectations of rising inflation and Fed tapering are weighing heavy on gold. Now, the attention turns to the US jobs data to decide the direction in gold.
Buy zone above—Rs 46,800 for the target of Rs 47,300
Sell zone below—Rs 46,600 for the target of Rs 46,300
Amit Khare, AVP- Research Commodities, Ganganagar Commodity
Gold and silver showed small upside movement on October 6. December gold contracts closed up by 0.32 percent at Rs 46,907 for 10 grams. While December silver contract futures closed at Rs 61,003 a kilogram, 0.03 percent up.
We saw follow-up buying in gold and silver at lower levels. Both metals are forming a bottom now, momentum indicator RSI also indicates the same and created a strong positive divergence in the daily chart,
So, traders are advised to create fresh long positions in gold and silver on small dips near the given support. Traders should focus on these important technical levels:
December gold closing price-Rs 46,907 | Support 1- Rs 46,650 | Support 2-Rs 46,450 | Resistance 1-Rs 47,170 and Resistance 2- Rs 47,450.
December silver closing price-Rs 61,003 | Support 1- Rs 60,500 | Support 2- Rs 60,000 | Resistance 1- Rs 61,425 | Resistance 2- Rs 62,050.
Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research
Gold and silver traded in a range in the international markets despite upbeat US non-farm employment data. Both metals settled on a mixed note. We expect them to remain volatile on October 7 but hold support levels.
Gold has support at $1,752-1,740 a troy ounce and resistance at $1,774-1,788. Silver has support at $22.34-22.10 a troy ounce and resistance at $22.80-23.00.
On MCX, gold has support at Rs 46,660-46,500 and resistance at Rs 47,155-47,330. For silver, support is at Rs 60,600-60,330 and resistance at Rs 61,400-61,900.
We suggest buying gold on dips around Rs 46,700 with a stop loss of 46,500 for a target of Rs 47155 and silver at around Rs 60,700 with a stop loss of Rs 60,330 for a target of Rs 61,500.
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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