Gold prices rose in early trade in the domestic futures market on October 27, in line with the trends in international markets as the US dollar softened and rising COVID-19 cases made investors look away from riskier equities.
A weaker dollar, concerns over rising cases of coronavirus and an uptick in demand in spot markets helped gold shine.
At 0940 hours, MCX December gold contracts were trading higher by 0.29 percent at Rs 51,080 per 10 gram. December silver futures were trading 0.81 percent higher at Rs 62,405 per kg.
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Gold and silver settled on a mixed note in the domestic market in the previous session. Gold settled at Rs 50,930 per 10 gram with a gain of 0.18 percent and silver at Rs 61,906 per one kilogram with a loss of 0.87 percent.
Rising coronavirus cases in the US turned investors cautious and they appear to have returned to safe-haven buying towards gold.
Weakness in domestic and international equity markets also supported gold prices.
As per a Reuters report, Asian stock markets fell on October 27 as soaring global coronavirus cases and slow progress on a US stimulus deal hammered investor sentiment and took a toll on Wall Street.
Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart, said that downbeat US new home sales data also supported gold prices. New 9,59,000 home sales were reported against expectations of 10,25,000.
Jain expects both the precious metals to remain volatile ahead of US elections, volatility in the dollar index and the second wave of coronavirus.
Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart
Gold is expected to hold key support of $1,884 per troy ounce and silver also holds the support of $24 per troy ounce in the international markets.
Gold is having support at $1,892-1,884 per troy ounce and resistance at $1,920-1,933 per troy ounce and silver is having support at $24.24-24 and resistance at $24.70-25.
On MCX, gold has support at Rs 50,780-50,600 and resistance at Rs 51,050-51,200. Silver has support at Rs 61,300-60,800 and resistance at Rs 62,500-63,300 levels.
Any dip in the prices of gold around Rs 50,600 and silver around Rs 61,300 would be an opportunity to buy.
Sriram Iyer, Senior Research Analyst at Reliance securities
International bullion prices gained in early Asia trade on Tuesday, supported by a weaker dollar and concerns stemming from the surging coronavirus spread globally and its economic fallout.
Technically, LBMA GOLD Spot respected a resistance near $1,914 where it touched the low $1,891 levels, indicating a sideways momentum in a range of $1,888-$1,915 levels.
LBMA Silver Spot is holding a resistance near $25 levels where it halted a further upside movement and ended with more than 1 percent loss, indicating a sideways momentum in the counter where prices could trade in a range of $23.75-$25 levels.
MCX Gold December did not sustain above Rs 51,000 levels whereas it holds support near Rs 50,700 level, indicating a sideways momentum in the range of Rs 50,600-51,050 levels.
MCX Silver December is trading on a negative note where below Rs 63,000 it could see a downside pressure up to Rs 62,100-61,000 levels.
Hareesh V, Head, Commodity Research, Geojit Financial Services
Gold may edge higher on a weak dollar and a correction in global equities. Hopes of more fiscal stimulus measures and the unresolved US-China tensions will also offer lower-level support to the commodity. At the same time, possibilities of global economic recovery may dent the safe-haven demand of the commodity.
Technical Outlook (London spot): If the support of $1,840 remains undisturbed, we can expect rallies to continue, but it has to break $1,920 to continue major rallies. An unexpected drop below $1,820 would extend selling pressure later.
Anuj Gupta, DVP- Commodities and Currencies Research, Angel Broking
Weaker US Dollar amid worries over the implacable virus might drive the investors towards safe-haven gold.
As for today, traders can buy gold at Rs 51,000 levels with the stop loss of Rs 50,700 levels for the target of Rs 51,500 levels.
They can buy silver at Rs 62,000 levels, with the stop loss of Rs 61,300 levels and for the target of Rs 63,300 levels.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.