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India Gold MCX August futures were trading higher on Wednesday tracking positive trend in the international spot prices after the US Federal Reserve Chair Jerome Powell promised not to raise interest rates too quickly.
Powell on Tuesday reaffirmed the U.S central bank’s intent to encourage a “broad and inclusive” recovery of the job market, said a Reuters report. Gold tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion, it said.
On the Multi-Commodity Exchange (MCX), August gold contracts were trading higher by 0.16 percent at Rs 47,085 for 10 grams at 0930 hours. July silver futures were trading 0.57 percent higher at Rs 67,899 a kilogram.
Gold and silver dipped again on Tuesday in a volatile session ahead of the Fed Chairman’s testimony. Both the precious metals settled on a slightly weaker note in the international markets.
Gold August futures contract were settled at $1777.40 per troy ounce, and Silver July futures contract settled at $25.81 per troy ounce. Both the precious metals also settled on a weaker note in the domestic markets.
Gold and silver plunged on Tuesday ahead of the US Federal Reserve Chairman testimony before a US House of Representatives panel. The benchmark 10-year bond yield is also sustaining below 1.50% and could support precious metals at lower levels, suggest experts.
“We expect gold and silver could show dead cat bounce in Wednesday’s session and the yellow metal could test $1800 per troy ounce and silver could test $26.20 per troy ounce levels again. Gold has support at $1764-1755 per troy ounce and resistance at $1788-1800 per troy ounce. Silver is has support at $25.55-25.30 per troy ounce and resistance at $26.20-26.40 per troy ounce,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, said.
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“At MCX, gold has support at Rs 46850-46720 and resistance at Rs 47240-47380. Silver is having support at Rs 67100-66600 and resistance at Rs 68000-68400 levels,” he said.
Jain suggests buying in gold around Rs 46900 with a stop loss of Rs 46680 for the target of Rs 47350, and in silver around Rs 67200 with a stop loss of Rs 66600 for the target of Rs 68200.
Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities
International spot gold and futures retreated on Tuesday despite weak dollar and easing bond yields. Domestic gold and Silver fell on Tuesday, tracking overseas prices, but weaker Rupee limited downside.
Meanwhile, Federal Reserve Chair Jerome Powell reaffirmed the US central bank's intent to encourage a broad and inclusive recovery of the job market, and not to raise interest rates too quickly based only on the fear of coming inflation.
Domestic gold and silver prices could trade flat on Wednesday morning, tracking overseas prices.
On the domestic front, MCX Gold August is holding support near 100-DMA which is placed at Rs 46900 levels above which could see an upside move Rs 47200-47350 levels.
MCX Silver July holds support near Rs 67000-65900 levels. Resistance is at Rs 68700-69800 levels.
Expert: Abhishek Chauhan Head Commodities & Currencies, Swastika Investmart
Gold Prices are not able to climb above crucial resistance levels. Bears likely to take control amid strength in the US Dollar which is likely to continue.
Both Gold and silver likely to face selling pressure on the higher side owing to strength in the US dollar. Gold has resistance at Rs 47400 while a break below Rs 46600 will open the door for more weakness.
Expert: Amit Khare, AVP- Research Commodities, Ganganagar Commodities Limited
Gold and Silver are showing recovery on daily charts and look set for a short-covering move. The momentum indicator RSI is also giving some positive clues.
Traders are advised to go for long in Gold - Silver and traders should also focus important technical levels given below for the day:
August Gold closing price 47,011: Support 1 - Rs 46750, Support 2 - Rs 46500, Resistance 1 - Rs 47250, Resistance 2 - Rs 47500.
July Silver closing price Rs 67,515: Support 1 - Rs 67000, Support 2 - Rs 66500, Resistance 1 - Rs 68100, Resistance 2 - Rs 68720.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
COMEX gold trades marginally higher near $1780/oz after a 0.3% decline yesterday. Gold has stabilized as the Fed’s projection of early rate hikes is countered by less hawkish comments from central bank officials.
ETF investors have also moved to the sidelines awaiting fresh triggers. Gold may witness choppy trade as market players react to economic data and central bank comments, however, the general bias remains weak owing to the upbeat outlook for the US dollar.Disclaimer
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