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Gold Price Today: Yellow metal to remain volatile after Powell speech, investors can create fresh buy positions

Gold was trading near three-week high supported by weakness in the dollar as market players played down the Fed’s monetary tightening concerns following Powell’s comments

August 30, 2021 / 10:11 AM IST

Gold was trading in the red in the Indian market on August 30 even as international prices climbed to their highest in more than three weeks after US Federal Reserve Chair Jerome Powell stopped short of providing any clear guidance on the timeline for paring economic support at the Jackson Hole economic conference.

On the Multi-Commodity Exchange (MCX), October gold contracts were trading marginally in the red, down 0.16 percent at Rs 47,461 for 10 grams at 0924 hours. September silver futures was flat at Rs 63,586 a kilogram.

Gold prices dropped for the third straight day on August 27 by Rs 201 to Rs 47,149 for 10 gram on sharp appreciation in the rupee. The metal shed Rs 232, or 0.49 percent, in the previous week.

International gold and silver prices, however, recovered last week, supported by a fall in the dollar. The dollar fell on the last trading day of the week after a dovish speech from Powell.

Powell indicated the Fed will remain cautious in taking a decision to raise interest rates as it tries to nurse the economy to full employment. The speech also indicated that he still regards a spike in inflation as temporary and offered no signal on when the central bank plans to cut its asset purchases beyond saying it could be this year, said Sriram Iyer, Senior Research Analyst at Reliance Securities.

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Moreover, rising coronavirus cases could drive expectations that the Federal Reserve might delay tapering of economic support and lent support to gold. Slightly weak US business activity in August supported the bullion. Powell’s dovish speech could continue to push prices higher next week.

However, there is talk in the markets the Fed could make an announcement at the September meeting after the awaiting the August non-farm payroll number in the first week of September.

On the domestic front, MCX October has settled above a pivotal level at Rs 47,500, which could push prices towards the resistance at Rs 47,800 and Rs 48,000 and a break above both resistances will push prices to Rs 48,300 levels.

On the other hand, a break below Rs 47,500 prices could move back to the supports at Rs 47,250, Rs 47,000 and Rs 46,750.

For silver, LBMA spot prices key support is at $22.60 and a break below could pull to $21.75. On the upside, resistance is at $24 and a sustained trade will be waited for further upside movement up to $24.70 to $25. MCX September silver supports are at Rs 62,245 and Rs 61,230. Resistances are at Rs 63,880 and Rs 64,600.

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Ravindra Rao,CMT, EPAT, VP- Head Commodity Research, Kotak Securities

Comex gold was trading little changed near $1,818 after a 1.4 percent gain on August 27. It was trading near three-week high supported by weakness in the dollar as market players played down the Fed’s monetary tightening concerns following Powell’s comments.

Price is also supported by increased geopolitical tensions relating to Afghanistan and mixed economic data from major economies and rising virus risks.

However, weighing on price is weaker investor interest, as is evident from ETF outflows. Gold has rescaled $1,800 and the momentum has turned positive but mixed factors may keep prices volatile.

Sandeep Matta, Founder, TRADEIT Investment Advisor

The precious metal registered immediate gain and went past $1,800 after the Fed chairman sounded more cautious than other officials on tapering, saying the central bank could start reduce its $120 billion in monthly bond purchases this year.

The comments led to some selling in the dollar that was positive for the gold.

Bullish sentiments in gold picked up in Indian markets also where the safe-haven metal has given a closing above Rs 47,500. The near-term outlook is expected to remain positive as Powell’s comments have breathed new life in the precious metal market.

Key level for Gold August Contract: Rs 47,313
Buy zone above Rs 47,320 for the target of Rs 47,807-48,000

Sell Zone below Rs 47,300 for the target of Rs 47,050-46,800

Amit Khare, AVP-Research Commodities, Ganganagar Commodities

Gold prices were modestly higher in midday US trading on some safe-haven demand and bulls taking advantage of the earlier dip in prices.

Silver was moderately lower. October gold futures were last down $3.16 at $1,814.59. September Comex silver was last up $0.053 at $24.076 an ounce.

The key outside markets today see the US dollar index showing down trading at 92.632, -0.062 (-0.07 percent). Gold and silver showed a strong up movement in Friday’s trading session.

Gold and silver are showing strength in the daily chart and the momentum indicator RSI was creating a strong positive divergence in the silver in daily as well as the forur-hourly chart. Any dips is an opportunity to create fresh long positions. Fundamentals also support bullions.

Traders are advised to create fresh buy positions in Gold and Silver near given support levels. They should also focus on these important technical levels:

August Gold closing price: Rs 47,538 | support 1-Rs 47,100 | Support 2-Rs 46,700 | Resistance 1- Rs 47,750 and Resistance 2 - Rs 48,000.

September Silver closing price: Rs 64,063 | Support 1-Rs 63,100 | Support 2-Rs 62,500 | Resistance 1-Rs 65,000 and Resistance 2-Rs 66,000.

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.
Sandip Das
first published: Aug 30, 2021 10:11 am
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