Gold price today: Yellow metal retreats from highs; crucial support at Rs 47,500

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In India, August gold futures were trading in the red on July 6 following muted international spot prices, however, the trend remained on the upside amid the rise in coronavirus cases, weakness in the dollar index and profit-taking in global equities at higher levels.

Gold may have fallen from the record high but experts say the crucial support for the yellow metal is placed at Rs 47,500-47,600 levels per 10 gm.

On the Multi-Commodity Exchange (MCX), August gold contracts were trading lower by 0.42 percent at Rs 47,842 per 10 gram at 0920 hours. July futures for silver were trading 0.36 percent lower at Rs 49,000 per kg.

Last week, gold and silver extended gain in the international market. Gold tested its fresh eight-year high at the Comex division and crossed $1,800 per troy ounce during the week. Silver also crossed $18.50 per troy ounce.

On MCX, following the strength in the rupee, both the precious metals settled on a mixed note. Gold settled at Rs 48,046 with a weekly loss of 0.54 percent while silver settled on a positive note at Rs 49,177 with a weekly gain of around 1.5 percent.

“Rising coronavirus cases and toll reaching closer to 11 million in the world, weakness in the dollar index and geopolitical tensions were supporting prices of both the precious metals,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart Pvt Ltd told Moneycontrol.

“However, strong US job data released on Wednesday and better-than- expected US, China, and EU manufacturing PMI triggered some profit-taking at higher levels in both the precious metals.”

Jain added that the overall trend still looks positive until both the precious metals hold strong support on a daily closing basis. “Gold is having strong support at $1,755 per troy ounce /INR 47500 on a closing basis and expected to hold this level,” he said.

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Expert: Sriram Iyer, Senior Research Analyst at Reliance securities

International gold and silver ended flat on July 3 and started flat to weaker on July 6 in Asian trade as worries over acceleration coronavirus cases offset losses from positive US and Chinese economic data.

Meanwhile, safe-haven appeal remained intact amid escalating tensions between the US and China.

Technically, LBMA Gold Spot was trading on a flat note in the $1,772.46-$1,777 levels range where it will continue its bearish momentum up to $1,766-$1,761 levels where resistance is at $1,779-$1,785 levels.

A stronger rupee could limit gains for gold in India. Technically, the MCX August gold contract is near its multiple support zone at 48,000 and 48,200 hold a strong resistance.  A breakdown below 4,8000 can see a downside movement up to 47,750-47,600 levels.

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