Gold and silver showed volatility on Wednesday due to strength in the dollar index. Gold prices gained for the fifth straight session and crossed $1800 per troy ounce for the first time in around the last three weeks. Both the precious metals settled on a mixed note in the international markets.
Gold prices showed strength on Wednesday amid weakness in the benchmark 10-year bond yields in the United States. 10-year bond yields slipped to 1.31% on Wednesday and supported both the precious metals. However, strength in the dollar index capped gains.
The US Federal Reserve released its June month monetary policy minutes on Wednesday and most of the members said that the reopening of the economy has been uneven and due to this inflation is rising.
“The monetary policy minutes were a mix of hawk and doves. We expect both the precious metals to remain volatile in Thursday’s session after Fed minutes and gold could test $1820 levels in upcoming sessions,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, said.
“Gold has support at $1792-1778 and resistance at $1814-1828 per troy ounce; silver has support at $25.88-25.55 per troy ounce and resistance at $26.40-26.70 per troy ounce,” he said.
Jain further added that at MCX, gold has support at 47700-47550 and resistance at 48100-48330 levels; silver has support at 68800-68500 and resistance at 69900-70300 levels.
“We suggest buying in gold around 47800 with a stop loss of 47580 for the target of 48300 and in silver around 69000 with a stop loss of 68500 for the target of 70200,” he added.
Expert: Ravindra Rao, CMT, EPAT, VP- Head Commodity Research, Kotak Securities
COMEX gold trades marginally lower near $1797/oz after a 0.4% gain yesterday. Gold is pressurized by firmness in the US dollar as FOMC minutes added to uncertainty about Fed’s monetary tightening. Also weighing on price is continuing ETF outflows.
However, supporting price is renewed virus concerns and uneven global economic recovery. Gold may remain sideways to lower as diverging monetary policy stance of Fed and other central banks may keep the US dollar supported.
Hareesh V, Research Head Commodities at Geojit Financial Services
Lower US treasury yields and worries over the rise in new virus cases due to the more virulent Delta variant are keeping gold prices steady near $1800 an ounce. Meanwhile, a strong US dollar and optimistic global economic sentiment continue to dampen its safe asset appeal
Prices continue to be choppy inside $1820-1748 levels and breaking any of the sides would suggest a short-term direction for the commodity. Anyhow, a close below $1745 is a bearish signal for the metal.
Sriram Iyer, Senior Research Analyst at Reliance Securities
International spot gold prices ended above $1,800/ounce on Wednesday as U.S. Treasury yields declined after minutes from the Federal Reserve's June meeting showed officials felt its substantial progress goal on economic recovery has not yet been met.
In other metals, international spot silver ended flat and 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 Wednesday, tracking overseas prices.
Domestic gold and silver prices could start weaker this Thursday morning, tracking overseas prices.
On the domestic front, MCX Gold August holds a strong support near 47700-47600 levels. Resistance is at 48100-48300 levels.
MCX Silver September holds a resistance 50-DMA near 70480 levels above which could see a bullish momentum up to 71200-72100 levels. Support is at 68900-67900 levels.
Amit Khare, AVP- Research Commodities, Ganganagar Commodities Limited
Gold and Silver again showed a mixed movement on Wednesday. Gold is showing more strength compared to Silver on the daily chart.
Traders are advised to create a long position in Gold rather than Silver and should also focus on important technical levels given below for the day:
August Gold closing price 47,910: Support 1 - 47700, Support 2 - 47500, Resistance 1 - 48100, Resistance 2 - 48400.
September Silver closing price 69,365: Support 1 - 68770, Support 2 - 68200, Resistance 1 - 70000, Resistance 2 - 70500.
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