Gold and silver prices suffered strong losses in early deals in the domestic futures market on August 12 as reports of coronavirus vaccine, strength in the dollar index and better than expected US PPI and core PPI numbers pushed both the precious metals lower.
On the Multi-Commodity Exchange (MCX), October gold contracts were trading lower by 2.73 percent at Rs 50,513 per 10 gram at 09:10 hours. Silver was at Rs 62,918 per kg, down 6 percent.
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In the international markets, gold suffered its biggest daily fall in seven years on Tuesday. On Wednesday, it fell another 1 percent to $1,891, reported Reuters.
Experts point out that it is the right time for profit-booking in gold and silver and traders should have a cautious approach while taking any position in bullion on these higher levels.
Prices are now in the overbought zone. The dollar index is recovered from lower levels due to hawkish Job data released last week.
“Approval for the first COVID-19 vaccine by Russia’s health ministry has put pressure on the bullion. Traders may book profit on higher levels and may go for a sell in gold and silver. However, global economic instability and geopolitical tension between the US and China may work as a supportive factor for bullion in the long run,” said Anuj Gupta, DVP- Commodities and Currencies Research, Angel Broking.
Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities
COMEX Gold December contracts trades about 2 percent down near $1910/oz after a sharp 4.6 percent decline yesterday.
Gold trades weaker weighed down by gains in US dollar, ETF outflows, rise in US bond yields and Russia’s claim of a vaccine for COVID-19.
After days of up-move, gold has finally shown some correction and a drop below $2,000/oz has led to extended losses.
We may see some extended losses unless fresh positive factors emerge, however, price may consolidate near $1900/oz level.
Expert: Manoj Jain, Director (Head – Commodity & Currency Research) at Prithvi Finmart
Gold and silver crashed yesterday after Russian President Vladimir Putin says that Russia made the first coronavirus vaccine and her daughter is vaccinated first.
Gold and silver are in the overbought zone and one correction was due. We expect both the precious metals remain volatile in today’s session and any rise in the prices will be an opportunity to sell again.
Gold is having crucial resistance at $1,955 per troy ounce and only it sustains above could show some strength else it will test its support level of $1,920-1,896 per troy ounce.
At MCX, gold is having strong resistance at Rs 52,220 and only it sustains above could give some relief rally else it will test its support level of Rs 51,330-51,000 levels.
Silver is also having crucial resistance at $26.80 per troy ounce and only it sustains above could show some strength else it will test it’s support level of $25.55-25 per troy ounce again.
At MCX, silver is having crucial resistance at Rs 67,500 and only it sustains above could show some relief rally else it will test it’s support level of Rs 66,200-64,800 levels again.
Momentum is still negative for both the precious metals and sell on rise strategy will work in today’s session.
Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold and silver tumbled on Tuesday amid profit-booking and hopes of a COVID-19 vaccine.
Prices were weighed down after news agencies reported that Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine.
The dollar extended gains on Tuesday and weighed on prices.
Reflecting sentiments, SPDR Gold ETF Trust fund said its holdings fell 0.3 percent to 1,257.93 tonnes on Tuesday.
However, the downside was limited amid weak risk appetite as the impasse between the US lawmakers on the stimulus continued to roll on with no word on when talks on a new package might resume.
International gold and silver started weak this Wednesday morning in Asian trade.
Technically, it started on a negative note below $1,900 levels this Wednesday morning. Resistance is at $1,920-$1,935 levels. Support is placed at $1,850-$1,820 levels.
Domestic gold and silver tumbled on Tuesday, tracking weak overseas prices and a strong rupee. Domestic bullion could start weak this Wednesday morning tracking weak futures prices.
Technically, MCX gold could start a gap down tracking weak overseas prices. Resistance holds at Rs 52,000-Rs 52,350 level and Support is at Rs 50,700-49,550 levels.
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