Gold price today: Yellow metal trades higher, silver up nearly 3%

gold

Gold was trading higher in India on December 21, tracking a positive trend seen in international spot prices as investors cheered news that a US fiscal stimulus deal was within reach. Silver, too, was up about 3 percent.

On the Multi-Commodity Exchange (MCX), February gold contracts were trading higher by 0.73 percent at Rs 50,670 per 10 gram at 0920 hours. March silver was trading 2.85 percent higher at Rs 69,842 per kilogram.

US congressional leaders have reached an agreement on a $900-billion package to provide the first new aid in months to the coronavirus-hit economy, the Senate's top Republican and Democrat leaders said on Sunday, with votes likely on Monday, a Reuters report said.

Experts are of the view that gold and silver prices are likely to remain firm and investors should use dips to buy into the precious metals. Gold has support placed at Rs 50,100 while on the upside resistance is placed at Rs 50,800.

Gold and silver prices showed strong gains in the previous week in international markets. Gold tested $1,900 per troy ounce and silver crossed $26 per troy ounce.

February gold contract settled at $1,887.00 per troy ounce, with a weekly gain of 2.35 percent, and March silver futures contract settled at $26 per troy ounce with a weekly gain of about 8 percent.

At home, February gold futures contract settled at Rs 50,304 per 10 gram with a weekly gain of about 2 percent, and silver March futures contract settled at Rs 67,907 a kilogram.

Both the precious metals gained last week amid progress on the US stimulus talks, weakness in the dollar index and the rollout of the COVID-19 vaccine in the United States, experts say.

At its monetary policy meeting, the Bank of Japan said it would increase its bond purchases and extend its pandemic-relief program by six months, which also supports prices of precious metals.

“Extension of QE programs by developed economies could fuel global inflation in the year 2021 and continues to support prices of both the precious metals. We expect gold and silver prices to remain firm this week and any dips in the prices would be a buying opportunity,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.

“Gold has support at $1,874-1858, while resistance at $1,900-1918 per troy ounce. Silver has support at $25.66-25.40, while resistance is at $26.40–26.70.”

Jain further added that at MCX, gold has support at 50,100-49,900 and resistance is placed at 50,580-50,800 levels. Silver has support at 67,200-66,600 and resistance is placed at 68,800-69,500 levels.

Trading strategy

Sriram Iyer, Senior Research Analyst, Reliance Securities

International gold and silver prices ended marginally lower on December 18 as the dollar rebounded slightly.

Domestic gold and silver ended marginally down on December 18, tracking overseas prices. US lawmakers edged closer to an agreement on a $900 billion virus-relief spending package with lawmakers and capped downside.

Domestic bullion could trade higher on December 21, tracking the international prices.

Technically, MCX February gold gave a breakout above 50-Daily Moving Average at 50,150 levels, which will continue its upside momentum up to 50,500-50,650 levels. Support is at 50100-49900 levels.

MCX March silver is trading below Rs 68,000, however, above 66,000, it will continue its bullish momentum up to 68,800-69,400 levels. Support is at 67,500-66,300 levels.

Ravindra Rao, VP- Head Commodity Research at Kotak Securities
Comex gold was trading about 0.7 percent higher near $1903/oz after a 0.1 percent decline on December 18. Gold edged up on the back of safe-haven buying amid renewed virus concerns post the UK’s discovery of a new variant of the coronavirus.

Also, supporting price is increased US-China tensions over blacklisting of some Chinese firms and prolonged UK-EU Brexit negotiations and progress on US stimulus.

However, weighing on price is a recovery in the dollar, vaccine progress and continuing ETF outflows. Gold rescaled $1,900/oz and could see some extended gains.

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.