Gold slipped in the Indian market in the morning trade on January 8 following a muted trend in international spot prices amid a surge in US Treasury Yields and a firm dollar.
On the Multi-Commodity Exchange (MCX), February gold contracts were trading lower by 0.29 percent at Rs 50,758 for 10 grams at 0920 hours. March silver was trading 0.26 percent lower at Rs 69,777 a kilogram.
Experts are of the view that investors can consider buying gold on the dip for a target of Rs 51,000-51,200 per 10 gm. Silver is also a buy for a target of Rs 71,500.
Gold and silver recovered from their previous day's low to settle on a positive note in the international markets on January 7. February gold futures contract settled at $1,913.60 per troy ounce and March silver futures at $27.26 per troy ounce.
Both metals also settled on a positive note in the domestic markets.
Gold and silver gained on January 7 despite a rebound in the dollar index, as the US Senate win for President-elect Joe Biden’s Democratic Party opened the path for the stimulus that would support precious metals prices, said experts.
“Rising global inflation in the year 2021 due to stimulus support by global central banks are also supporting prices of both the precious metals. We expect both the precious metals to remain in the limelight and continue to get support at lower levels,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“On MCX, gold has support at 50,660-50,400 and resistance is placed at 51,200-51,550. Silver has support at 69,200-68,800 and resistance is placed at 70,700-71,500 levels,” he said.
Jain suggested buying gold on dips around 50,660 with the stop loss of 50,300 for the target of 51,200 and silver around 69,000 with the stop loss of 68,200 for the target of 71,500.
Trading Strategy
Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold and silver prices ended lower on January 7 as the dollar recovered from two-year lows. Domestic gold and silver ended higher, bucking the weak overseas trend.
The higher yields are also pulling some flight-to-safety money out of the bullion market, though the prospect of further fiscal stimulus under a Democratic administration capped losses.
Domestic bullion could start flat to marginally lower on January 8, tracking international prices.
Technically, MCX February gold can give a gap down opening, tracking the global market. A breakdown below 50,800 can see a sideways to marginal downside momentum up 50,500-50,250 levels. Resistance is at 51,050-51,300 levels.
On MCX, March silver could hold support near 69,000 from where a bounce can be expected up to 70,600-71,200 levels. Support is at 69,500-68,700 levels.
Hareesh V, Research Head Commodities at Geojit Financial Services
Hopes of additional fiscal stimulus measures from the new US administration, a multi-year weak US currency and an increase in new virus cases continue to support the yellow metal.
Meanwhile, investors remained cautious ahead of the key US non-farm payroll data scheduled later the day.
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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