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Gold Price Today: Yellow metal to remain volatile as investors turn cautious ahead of Powell’s speech

Investors are waiting for Fed chief Jerome Powell’s speech later in the day at the Jackson Hole symposium after some US central bank officials called for paring bond purchases

August 27, 2021 / 09:51 AM IST

Gold was trading steady in the Indian market on August 27, as investors across the world awaited Fed chief Jerome Powell’s speech later in the day at the Jackson Hole symposium after some US central bank officials called for paring bond purchases.

On the Multi-Commodity Exchange (MCX), October gold contracts were trading in the green, rising 0.39 percent at Rs 47,419 for 10 grams at 0920 hours. September silver futures were trading 0.32 percent higher at Rs 62,926 a kilogram.

Ahead of the Jackson Hole meeting, Federal Reserve’s hawkish policymakers urged the central bank to begin paring bond purchases which they said had become ineffective, if not downright harmful.

Gold prices fell for the second successive day on August 26, down Rs 98 at Rs 47,350 on a stronger rupee and subdued global cues. The yellow metal traded lower as investors were cautious ahead of the Jackson Hole symposium.

"Gold and silver showed extreme volatility on Thursday amid volatility in the dollar index. Both precious metals settled on a mixed note in the international market,”  said Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research.

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December gold futures contract settled at $1,795.20, gaining 0.23 percent and September silver futures contract settled at $23.55 a troy ounce with a loss of 0.93 percent, Jain said.

He expects both metals to remain volatile on August 27 ahead of Powell’s speech. Gold has support at $1,784-1,768 and resistance at $1,808-1,822 and silver has support $23.20-22.88 and resistance at $23.88-24.20, Jain said.

"At MCX, gold has support at 47,050-46,880 and resistance at 47,380-47,600, while silver has support at 62,300-61,900 and resistance at 63,100-63,500 levels. We suggest buying in gold on dips around 47,000 with a stop loss of 46,770 for the target of 47,500," he added.

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

Comex gold was trading marginally higher near $1,800 after slipping 0.2 percent the previous day. Gold was supported by safe-haven buying amid increasing tensions in Afghanistan following the attacks at Kabul airport. Mixed economic data from major economies and rising virus cases also lent support.

However, recovery in US dollar amid some hawkish Fed comments, weaker investor interest and drop in China’s gold imports weighed on prices. Gold may continue to trade firm amid risk aversion in the market and a fall may come only if the Fed Chairman sounds too hawkish.

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Gold prices started flat on August 26 and fell gradually during the first half to hit a low of Rs 46,934. However, prices recovered gradually to hit a high of Rs 47,380.

The metal has remained subdued in the last two sessions as the dollar and US treasury yields firmed, while uncertainty about the Federal Reserve’s strategy on tapering kept investors on edge.

Gold prices can consolidate in the Rs 47,000-47,500 range for 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.
Sandip Das
first published: Aug 27, 2021 09:51 am
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