Gold prices inched lower on October 6 as a firmer dollar and a rise in US Treasury yields weighed on the precious metal’s appeal amid an increasing focus of investors on non-farm payrolls data due later this week.
On MCX, gold contracts were down 0.23 percent to Rs 46,648 for 10 grams at 9.26 am. September silver futures were trading lower by 0.33 percent to Rs 60,782 a kilogram.
Gold prices soared by Rs 288 to Rs 46,682 per 10 gram on October 5 on a weakening rupee and an improving consumer demand. However, weak global cues, tapering fears, rising Treasury yields and soaring dollar index capped the upside.
Gold prices remained under pressure in the previous session as the dollar index remained supported and the US 10-year bond yield advanced 2 percent. However, gold prices in MCX remain supported at lower levels due to rising crude oil prices which pressure the dollar index. Gold has support at 46280 and prices are likely to bounce at Rs 47000.
Silver also looks firm at this level. It has support at Rs 60,000 and resistance at Rs 61,200, said Abhishek Chauhan, Head of Commodity and Currency at Swastika Investmart.
Trading Strategy
Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research
Gold and silver showed some profit-taking on Tuesday amid record gains in the benchmark 10-year bond yields in the US ahead of the non-farm payroll data. Both the precious metals settled on a slightly weaker note in the international markets. The market is to remain volatile ahead of the US non-farm employment report but lower levels of support are protected. Buy on dips strategy could work for both the precious metals.
Gold has support at $1750-1742 per troy ounce and resistance at $1772-1784 per troy ounce, while silver has support at $22.40-22.20 per troy ounce and resistance at $22.84-23.00 per troy ounce. On MCX, gold has support at Rs 46,600-46,380 and resistance at Rs 46,880-47,050, while silver has support at Rs 60,600-60,100 and resistance at Rs 61,400-61,900 levels. We suggest buying gold on dips around Rs 46,600 with a stop loss of Rs 46,380 for the target of Rs 47,000.
Sandeep Matta, Founder, TRADEIT Investment Advisor
The precious metal is trading under pressure and finds support around its key phycological level of $1750/oz. Reduction in bond purchase, strong dollar and higher yield continue to weigh on the gold prices. We anticipate that a bullish trend in the counter is going to start soon and we advise long-term investors to initiate delivery-based position at current levels and add more on dips. Gold on MCX is also operating in the small range under pressure. The outlook is positive and market participant should look for buying opportunities at lower level of the range.
Key level for gold December Contract – Rs 46,680
Buy zone above – Rs 46,700 for the target of Rs 46,880-47,070
Sell zone below – Rs 46,650 for the target of Rs 46,485-46,290
Ravi Singh, Vice-President & Head of Research, ShareIndia
Gold prices fell marginally yesterday amid range-bound trading. It may trade between Rs 46,500 and Rs 46,850 with a little upward bias today. India imported 91 tonnes of gold in September, compared to 12 tonnes a year earlier.
Buy zone above - Rs 46,850 for the target of Rs 47,300
Sell zone below - Rs 46,500 for the target of Rs 46,200
Amit Khare, AVP- Research Commodities, Ganganagar Commodity
Gold and silver prices were a bit down in midday US trading on Tuesday, amid solid rebounds in the US stock indices after they saw selling pressure on Monday. A firmer US dollar index and rising US Treasury yields yesterday were also negatives for the metals markets. December gold futures were last down $8.60 at $1,759.00. December Comex silver was last down $0.059 at $22.585 an ounce.
Yesterday we saw follow-up buying in gold and silver at lower levels. Now both metals are forming a bottom. Momentum indicator RSI is also indicating the same and creating a strong positive divergence on daily chart. Traders are advised to create fresh long positions in gold and silver on small dips near given support, traders should focus important technical levels:
December Gold closing price - Rs 46,757, Support 1 - Rs 46450, Support 2 - Rs 46,300, Resistance 1 - Rs 46,850, Resistance 2 - Rs 47,125.
December Silver closing price - Rs 60,986, Support 1 - Rs 60,600, Support 2 - Rs 60,000, Resistance 1 - Rs 61,330, Resistance 2 - Rs 62,000.
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