Gold was trading flat in the Indian market on September 21 as investors adopted a risk-averse stance ahead of the Federal Reserve’s policy meeting where the American central bank is expected to offer cues to tapering its asset purchase programme.
On the Multi-Commodity Exchange (MCX), October gold contracts were trading lower by 0.16 percent at Rs 46,205 for 10 grams at 0920 hours. September silver futures were marginally by 0.02 percent at Rs 59,622 a kilogram.
Gold traded weak on September 20 at Rs 46,282 amid a lacklustre global trend and a firm dollar. The downside was, however, capped by a fall in equities, rupee and 10-year bond yields.
The yellow metal traded in a narrow band as investors awaited the US Fed policy outcome and bond-tapering plans.
"Prices of gold and silver have shown some pullback because of the problems in the Chinese real estate sector but ahead of the FOMC meeting sideways move can be seen," said Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart.
"Gold has support at 46,600, which may give a bounce towards 46,500 levels. However, the upside may remain limited due to the strength in the dollar index. However, silver prices are looking under pressure due to selling pressure in base metals."
Trading Strategy
Amit Khare, AVP- Research Commodities, Ganganagar Commodities
Gold prices were moderately up in the midday US trading on September 20 on some safe-haven demand amid a rough start to the trading week for world stock markets.
If the selling pressure in the global markets persists this week, the two metals are likely to see better safe-haven demand.
As per the technical chart, both metals are trading in the oversold zone, which means we can see a good short-covering rally.
Momentum indicator RSI is also pointing to the same and creating a strong positive divergence in 4-hourly as well as daily charts.
Traders are advised to create fresh buy positions in gold and silver and focus on these important technical levels:
October gold closing price: Rs 46278 | Support 1- 46,000 | Support 2-45,800 | Resistance 1 -46,550 and Resistance 2-46,800.
December silver closing price: Rs 59,609 | Support 1- 59,000 | Support 2-58,000 | Resistance 1-60,150 and Resistance 2-60,700.
Sandeep Matta, Founder, TRADEIT Investment Advisor
Gold prices built some speculative interest and closed moderately high amid a selloff in global equity markets on account of the Evergrande crisis.
The Fed begins its two-day meeting on September 21. Market participants hope to gain more clarity on the timeline for tapering its monthly asset purchases of $120 billion. Precious metals are light ahead of the meeting, which could be positive for the safe haven.
Key level for gold– 46,178
Buy zone above – 46,180 for the target of 46,450-46,650
Sell zone below – 46,170 for the target of 46,060-45,900
Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research
Gold and silver showed high volatility on September 20 amid strength in the dollar index and a growing threat of Evergrande default in China. Both precious metals settled on a mixed note in the international markets.
We expect the metals to remain volatile on September 21 as well. Pressure in global equities could support safe-haven buying in both metals.
Gold has support at $1,750-1,734 and resistance at $1,772-1,784 a troy ounce, while silver has support at $22.00-21.84 a troy ounce and resistance at $22.50-22.70.
On MCX, gold has support at Rs 46,050-45,880 and resistance at Rs 46,480-46,660. For silver, support is at Rs 59,100-58,800 and resistance at Rs 60,100-60,700.
We suggest buying in gold around Rs 46,100 with a stop loss of Rs 45,880 for a target of Rs 46,550 and silver around Rs 59,200 with a stop loss of Rs 58,700 for a target of Rs 60,300.
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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