Gold prices hit a more than five-week low on September 20 as the dollar firmed with markets closely watching a US Federal Reserve meeting for clues on when the central bank will start tapering its pandemic-era stimulus.
On the Multi-Commodity Exchange (MCX), October gold contracts were trading lower by 0.15 percent at Rs 45,917 for 10 grams at 1137 hours. September silver futures were down 0.25 percent at Rs 59,840 a kilogram.
The bullion metal has been trading lower than its 5, 20, 50, 100, and 200 days’ simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 35.31, which suggests weakness in prices.
"After heavy selling, the focus of investors has shifted to Fed's upcoming meeting. The dollar index gained for two consecutive days and it gained 0.25% in the previous session. Prices of gold and silver are looking oversold and may move sideways today," said Abhishek Chauhan, Head of Commodity & Currency at Swastika Investmart.
"However, selling pressure can be seen if prices rise towards resistance levels. In MCX, Gold has resistance at 46400 and support at 45700. Silver has resistance at 61800 and support at 60000.
Amit khare, AVP- Research Commodities, Ganganagar Commodities
Gold prices hit a four-week low and silver a five-week low last week. Stronger-than-expected US economic reports, which rallied the US dollar index, helped to send gold and silver prices south. The near-term chart postures for both metals have deteriorated significantly this week, which is also inviting the shorter-term futures traders to play the short side of the markets. Last week has been an extremely difficult week for gold losing approximately $36.
Gold continued its decline, although only fractionally. As per technical chart both metals are trading at oversold zone, which means any time we can see a good short covering rally in bullions. Momentum indicator RSI is also indicating the same, so positional traders are advised to create fresh buy positions especially in gold on small dips near 45900-45700. Traders should focus important technical levels.
October gold closing price 45986, support 1 - 45700, support 2 - 45450, resistance 1 - 46200, resistance 2 - 46510
December silver closing price 59992, support 1 - 59500, support 2 - 59000, resistance 1 - 61000, resistance 2 - 62000.
Sandeep Matta, Founder, TRADEIT Investment Advisor
Gold is struggling to find new buyers and hit four weeks low while trading below $1750/oz as market participants are expecting less dovish commentary from Fed monetary policy this week.
Gold on MCX has also following the global directives and trading in the danger zone. The precious metal is trading around the technical support and may see some speculative interest around these levels therefore we advised to execute trades strictly as per the pivot levels.Key level for gold– 46026
Sell zone below – 46000 for the target of 45800-45600Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.