Gold Price Today: Yellow metal regains strength; crucial support at 45,550

Gold recovered in the Indian market on August 9 after a steep fall in the previous trading session. International spot prices also bounced back but were trading at a multi-month low hurt by a rise in US bond yields and a stronger dollar.

On the Multi-Commodity Exchange (MCX), October gold contracts were trading 0.38 percent higher at Rs 46,060 for 10 grams at 0930 hours. September silver futures were trading 0.75 percent higher at Rs 63,105 a kilogram.

Spot gold was trading at $1,730.47 per ounce. On August 9, prices touched $1,684.37, their lowest since March 31, said a Reuters report. Gold fell on robust US jobs data in the previous week that raised bets over the Federal Reserve tapering stimulus earlier than expected, the report added.

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Gold and silver prices crashed following a strong US job report and strength in the dollar index.

December gold futures contract settled at $1,726.50 a troy ounce with a loss of 2.10 percent and silver September futures contract at $23.27 a troy ounce with a loss of 4.36 percent. Both precious metals settled on a weaker note in the domestic markets.

“Despite US Fed planning to taper its bond-buying programme sooner than expected, rising coronavirus cases in Asian and African countries could support precious metal prices at lower levels,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, said.

Gold could hold $1,710 a troy ounce and silver prices could hold $22.80 per troy ounce on a closing basis. At MCX, gold has support at Rs 45,550-45,300 and resistance at Rs 46,100-46,380. Silver has support at 62100-61500 and resistance at 63,200-63,800, Jain said.

He suggests buying in gold around Rs 45,700 with a stop loss of Rs 45,450 for the target of Rs 46,250 and in silver around Rs 62,100 with a stop loss of Rs 61,500 for the target of Rs 63,200.

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Expert: Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities

Comex gold was trading 0.5 percent higher near $1,735 after falling 2.1 percent the previous day when it tested March lows. Gold inched up on dip buying and is supported by increased geopolitical tensions, rising coronavirus cases, rising inflationary pressure and concerns about the Chinese economy.

However, weighing on price is firmness in the US dollar and weaker investor interest.

The general bias for gold is on the downside amid increased debate about the Fed's monetary tightening however, the recent sell-off seems overdone and some recovery is possible.

Sriram Iyer, Senior Research Analyst, Reliance Securities

International spot and futures bullion prices crashed on strength in the dollar and strong US jobs data that bolstered expectations of an early tapering of the Federal Reserve's economic support measures.

Domestic gold and silver prices ended with lower, tracking overseas prices. The bullion index ended weaker, tracking weak domestic gold and silver prices.

Domestic gold and silver prices and Bullion Index futures will start marginally higher on August 10, tracking overseas prices.

On the domestic front, below Rs 46,300, MCX October gold will continue its correction up to Rs 46,100-45,850. Resistance is at 46,300-46,500.

September silver is sustaining below 63,000 which could see it slip to 61,000-59,900. Resistance is at Rs 63,300-64,000.

Abhishek Chauhan Head Commodities & Currencies, Swastika Investmart

Gold fell 1.6 percent and silver 4 percent on MCX on August 9. Downside momentum will continue on August 10 and gold may test 45,400, while silver may test 61,000 on the downside.

Amit Khare, AVP- Research Commodities, Ganganagar Commodities Limited

If gold and silver hold their August 10 low then huge short-covering is possible in bullions in the next few days. Traders are advised to take small risks and invest in gold and silver for a short-term period of two-three months.

Both metals are trading in oversold zone and traders should also focus on important technical levels given below for the day:

August gold closing price Rs 45,886 | support 1-45,550 | support 2: 45,250 |resistance 1-46,200 | resistance 2: 46,510.

September silver closing price Rs 62637 | support 1- 62,000 | support 2-61,300 | Resistance 1-64,000 | Resistance 2- 65,250.

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