India Gold MCX August futures were trading higher on Wednesday tracking a positive trend seen in the international spot prices which were trading near a 3-week high supported by a drop in US Treasury Yields.
Spot gold was trading around at $1,800.42 per ounce, after hitting its highest since June 17 at $1,814.78 on Tuesday, said a Reuters report. Investors awaited the release of minutes from the Federal Reserve’s June meeting for clues on policy outlook, it said.
On the Multi-Commodity Exchange (MCX), August gold contracts were trading 0.12 percent higher at Rs 47,743 for 10 grams at 0930 hours. September silver futures were trading 0.01 percent lower at Rs 69,504 a kilogram.
Gold and silver showed extreme volatility on Tuesday in the international markets amid a strong comeback by the dollar index. Both precious metals settled on a mixed note.
Gold August futures contract settled at $1794.20 per troy ounce, and silver September futures contract settled at $26.17 per troy ounce. Both the precious metals also settled on a mixed note in the domestic markets.
“Decline in 10-year benchmark bond yield supported gold and silver prices. 10-year bond yield slipped to 1.36% levels on Tuesday. Ahead of the U.S. Federal Reserve monetary policy meeting minute’s traders reduced their long position in gold and silver,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, said.
The U.S. Federal Reserve will release their monetary policy meeting minutes today and comments on the interest rates and inflation will give further directions to the market.
“We expect both the precious metals to remain volatile and expected to show some strength again in today’s session. Gold has support at $1784-1772 per troy ounce and resistance at $1804-1820 per troy ounce; silver has support at $25.88-25.55 per troy ounce and resistance at $26.50-26.80 per troy ounce,” he said.
Jain further added that at MCX, Gold has support at Rs 47550-47400 and resistance at Rs 47880-48000; silver has support at Rs 69100-68700 and resistance at Rs 70100-70700 levels. “We suggest buying in gold around Rs 47550 with a stop loss of Rs 47350 for the target of Rs 47880,” he added.
Expert: Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securities
COMEX gold trades modestly higher near $1800/oz after a 0.6% gain in the previous session. Gold is supported by inflation concerns, rising virus cases, mixed economic data from major economies, and uncertainty caused by China’s crackdown on tech firms.
However, weighing on price is weaker investor interest and Fed’s monetary tightening expectations. Gold may remain range-bound ahead of FOMC minutes however prospect of the Fed's hawkish stance may keep pressure on prices.
Amit Khare, AVP- Research Commodities, Ganganagar Commodities Limited-
On Tuesday, we saw profit booking in Gold and Silver at higher levels, but the overall structure of Bullion's are strong. The momentum indicator RSI has also cooled down in the hourly chart and again ready for an upside movement.
Traders are advised to create long positions in Gold and Silver. They should also focus on important technical levels given below for the day:
August Gold closing price 47,684: Support 1 - Rs 47300, Support 2 - Rs 47000, Resistance 1 - Rs 48100, Resistance 2 - Rs 48500.
September Silver closing price Rs 69,512: Support 1 - Rs 68500, Support 2 - Rs 68100, Resistance 1 - Rs 70500, Resistance 2 - Rs 71400.
Sandeep Matta, Founder, TRADEIT Investment Advisor
Precious metal seems to be in the process of switching its direction as after three weeks of sideways consolidation it crossed $1800 level on Tuesday though could not close above it.
The U.S. bond yields held near a two-week low while investors are watching for the Federal Reserve's minutes to gauge the outlook for U.S. interest rates.
Gold on MCX also made a stellar move and touched the Rs 48000 mark and closed well above Rs 47500 levels. It seems that prices have entered the accumulation zone for the gold and any dip should be a buying opportunity until it breaches and close below Rs 46500 levels.
Key level for GOLD AUG Contract – Rs 47678
Buy Zone Above – Rs 47700 for the target of Rs 48000-48300
Sell Zone Below – Rs 47650 for the target of Rs 473560-47028
Sriram Iyer, Senior Research Analyst at Reliance Securities
International spot gold prices ended with solid gains, briefly rising above the $1800/ounce mark at one point, bolstered by a retreat in U.S. bond yields.
In other metals, international spot silver fell from session high’s tracking the strength of the Dollar.
Domestic gold ended higher, while silver gave up gains to end in the red on Tuesday, tracking overseas prices. Domestic gold and silver prices could start flat this Wednesday morning, tracking overseas prices.
On the domestic front, MCX Gold August holds strong support near Rs 47650-47400 levels. Resistance is at Rs 47800-48000 levels.
MCX Silver September holds a resistance 50-DMA near Rs 70480 levels and above which could see a bullish momentum up to Rs 71200-72100 levels. Support is at Rs 68800-67900 levels.
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