Gold price today: Yellow metal trades with positive bias, may retest Rs 50,000

gold

Gold was trading higher in Indian markets on December 17, supported by a weaker dollar, the Federal Reserve keeping the interest rates low and US stimulus talks gaining pace.

On the Multi-Commodity Exchange (MCX), February gold contracts were trading higher by 0.37 percent at Rs 49,782 per 10 gram at 0920 hours. March silver was trading 1.1 percent higher at Rs 66,665 a kilogram.

Experts are of the view that investors should use dips to buy into precious metals as gold could retest Rs 50,000 per 10 gm in the near term.

Gold and silver surged amid weakness in the dollar index and the US Congress is close to passing a second stimulus in the United States. February gold futures contracts settled at $1,859.10 a troy ounce, and silver March futures contracts at $25.05 a troy ounce.

Both the precious metals also settled on a positive note in the domestic markets. The dollar index slipped to a fresh two and a half years low on December 16 and tested a low of 90.045 during the European session and supported both the precious metals, experts say.

“Fed is expected to maintain the accommodative policy until inflation runs moderately above 2 percent for some time. Fed temporarily extended US dollar liquidity swaps and repurchase agreement facility for foreign and international monetary authorities through September 30, 2021. The Fed vote in favour of policy was unanimous,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.

“We expect both the precious metals to remain firm in today’s session and a further upside is expected. At MCX, gold has support at Rs 49,300-49,100 level and resistance at Rs 49,800-50,050. Silver has support at Rs 65,300-64,800 and resistance at Rs 66,800-67,500,” he said.

Jain suggested buying on the dip in gold at around Rs 49,300 and silver at Rs 65,200 levels. Gold could test 50,000 and silver 67,500 in the coming sessions.

Trading strategy

Sriram Iyer, Senior Research Analyst, Reliance Securities

International gold and silver prices ended with gains on December 16, supported by prospects for more stimulus measures after the US Federal Reserve pledged to keep its benchmark interest rate near zero until the recovery was complete.

Tracking overseas prices, domestic gold and silver ended higher.

Domestic bullion could trade flat on December 17, tracking international prices.

Technically, MCX February gold is trading above its 21-Daily Moving Average at Rs 49,200 levels, above which it will continue its upside momentum to Rs 49,900-50,150. Support is at Rs 49,400-49,200.

MCX March silver has given a breakout above the horizontal trend line and is trading above 100-DMA which is at Rs 64,400. It will continue moving to 66100-67200 levels from the said level. Support is at Rs 64,500-63,300 levels.

Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

Comex gold was trading 0.5 percent higher near $1,869/oz after gaining 0.2 percent the previous day. Gold was trading higher supported by a weak dollar, Fed’s stance to keep interest rates low and increased efforts to finalise a stimulus deal in the US.

However, weighing on price is vaccine progress and continuing ETF outflows. Gold has edged up on weaker dollar and stimulus expectations, however, it remains to be seen whether the price sustains at the higher level as the Fed's stance was largely expected, while ETF investors have continued to stay away from the metal.

A technical breakout might happen if the price closes above $1,888, the first indication of a temporary bottom.

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.