India Gold December Futures eased slightly on October 29 despite a positive trend seen in the international spot prices. Experts are of the view that yellow metal should be able to hold on to 50,250-50,000, and on the upside, crucial resistance is placed at Rs 51,000.
On the Multi-Commodity Exchange (MCX), December gold contracts were trading lower by 0.15 percent at Rs 50,420 per 10 gram at 0920 hours. December silver futures were trading 0.09 percent lower at Rs 60,082 per kg.
Gold and silver crashed on October 28 amid strength in the dollar index and upbeat US goods trade balance data. The dollar index gained and tested 93.50 marks after a heavy sell-off in the global equities due to the second wave of coronavirus in the US and EU.
Gold settled at $1879.20 per troy ounce with a loss of 1.71% and silver settled at $23.36 per troy ounce with a loss of 4.92%. Domestic markets were also settled on a weaker note.
“Global investors moved out from riskier assets and moved to safe haven buying in the dollar again. Gold slipped to four weeks lows and silver slipped to three weeks low in the international markets amid rise in COVID-19 pandemic infections in the U.S. and Europe, as well as other parts of the world, are fanning worries,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“At MCX, Gold has a support at 50250-50000 levels and resistance is placed at 50780-51000 levels. Silver is having support at 59500-59000 levels and resistance at 60800-61500 levels,” he said.
Jain further added that he expects both the precious metals could get support at lower levels gold is expected to hold 50000 and silver is expected to hold 59000 levels on a closing basis, and any dip in the prices towards support levels would be an opportunity to buy again.
Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold and silver prices crashed on Wednesday as investors flocked to the dollar in the absence of signs of any imminent U.S. fiscal stimulus measures to ease the economic blow from the COVID-19 pandemic.
French President Emmanuel Macron and German Chancellor Angela Merkel ordered their countries back into lockdown on Wednesday on the back of a massive second wave of coronavirus infections.
The U.S. Dollar rose to a more than one-week high against a basket of other major currencies with the prospect of fresh European lockdowns weighing heavily on the non-dollar currencies.
Markets will look ahead to the ECB and BoJ meeting today. The European Central Bank is expected to resist pressure to unveil fresh stimulus measures but it will likely pave the way for action in December.
The Bank of Japan is set to maintain its massive stimulus programme and vow to take further action if the virus-led economic fallout threatens a return to deflation.
Domestic bullion could start flat this Thursday morning, tracking a subdued start in the overseas prices. Technically, MCX Gold December has given a breakdown below 50700 levels after a constant struggle to break above 51000 levels.
The breakdown indicates sideways to marginal downside momentum to continue up to 50200-49800 levels where Resistance is at 50700-50900 levels.
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