Gold was trading higher on July 20 following a positive trend in international spot prices amid concerns over the spread of the delta variant of the coronavirus across the globe.
On the Multi-Commodity Exchange (MCX), August gold contracts were trading 0.37 percent higher at Rs 48,270 for 10 grams at 0930 hours. September silver futures were trading 0.30 percent higher at Rs 67,449 a kilogram.
Rising coronavirus cases across the United States and other countries fuelled fears of a pandemic resurgence as the highly contagious delta variant appeared to be taking hold, a Reuters report said.
On July 19, gold and silver plunged in the international markets amid gains in the dollar index. Both the precious metals settled on a weaker note in the international markets.
August gold futures contract settled at $1,809.20 a troy ounce, and September silver futures contract settled at $25.14 a troy ounce. Due to weakness in the rupee both precious metals settled on a mixed note in the domestic markets.
Gold and silver slipped amid strength in the dollar. The dollar index surpassed crucial resistance of 92.80 and the benchmark 10-year bond yield slipped below 1.25 percent due to safe-haven buying after the resurgence of coronavirus, experts said.
“Rising cases of coronavirus in many countries triggered sell-off across asset classes. Global equities tumbled, crude oil prices also slipped more than 5 percent and silver prices hit a three-month low,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, said.
Gold and silver prices would remain volatile on July 20 and are expected to hold key support levels of $1,800 and $25 on a daily closing basis, he said. If the dollar index further strengthens above 92.80, it can push precious metals lower.
At MCX, gold has support at 47,920-47700 and resistance at 48,250-48,480 levels. Silver has support at 66,800-66,500 and resistance at 67,700-68,200 levels.
Jain suggests buying gold on dips around Rs 47,920 with a stop loss of 47,700 for a target of 48,300 and in silver around Rs 66,800 with a stop loss of 66,400 for the target of 68,000.
Technical indicators
Expert: Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securities
Comex gold was trading 0.5 percent higher near $1,819 after slipping 0.3 percent in the previous session. Gold was supported by lower bond yields and safe-haven buying amid increasing virus cases, US-China tensions, and rising inflation concerns.
However, the firmness in the dollar and weaker investor and consumer demand weighed on the price. Gold has managed to hold above $1,800 and may benefit from safe-haven buying, however, any major upside will be challenged by a stronger dollar.
Sriram Iyer, Senior Research Analyst at Reliance Securities
International spot gold ended flat in choppy trade on July 19, as a buoyant dollar offset a slump in Treasury yields to their lowest levels since February.
International spot silver prices crashed, tracking the strength of the dollar.
Domestic gold ended the session marginally higher, tracking a rebound in overseas prices.
Domestic gold and silver prices could start flat to marginally higher on July 20, tracking overseas prices.
On the domestic front, MCX August gold took support at 47,800 levels, where it closed above 48,000, indicating sideways momentum within the 47,700-48,200 range in the coming session.
MCX September silver below 68,000 could see 66,800-66,000. Resistance is at 67,700-68,400.
Amit Khare, AVP- Research Commodities, Ganganagar Commodities Limited
Gold is looking more strong than silver on the daily chart. Traders are advised to create long positions in gold and silver near support levels, and should also focus on important technical levels given below for the day:
August gold closing price: Rs 48,094; support 1: Rs 47,800; support 2: Rs 47,600; resistance 1: 48,370 and resistance 2: 48,600.
September silver closing price: Rs 67,246; support 1: 66,600; support 2: 66,000; resistance 1: 67,860 and resistance 2: 68,500.
Sandeep Matta, Founder, TRADEIT Investment Advisor
The confluence point for the gold is setting around $1,800, as both bulls and bears are applying their own forces to keep gold prices near the point.
The metal has managed to gain a couple of dollars, however, it is trading under tremendous pressure despite all favourable conditions particularly wobbly global equity markets and declining bond yields.
Gold on MCX is also under pressure and has somehow managed 48,000 levels. We anticipate the momentum to shift towards the bears’ side and this is not the right time to enter into fresh long trades.
It is becoming a trader’s market to capture a few hundred points on either side of the pivot level.
Key level for GOLD AUG Contract: 48,037
Buy Zone Above: 48,050 for the target of 48,195-48,365
Sell Zone Below: 48,000 for the target of 47,865-47,700
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management.
