India Gold October Futures rose on Tuesday tracking a positive trend in the international spot prices as the US dollar remained subdued ahead of the US Federal Reserve’s monetary policy meeting.
The dollar index was little changed after posting its worst day in more than two weeks in the last session. A weaker greenback makes gold less expensive for holders of other currencies, said a Reuters report.
On the Multi-Commodity Exchange (MCX), October gold contracts were trading higher by 0.39 percent at Rs 51,890 per 10 gram at 0920 hours. September silver futures were trading 0.6 percent higher at Rs 69,370 per kg.
Experts are of the view that the precious metal could remain volatile and may face resistance in the range of Rs 51,800-52,000 per 10 gm. On the downside, Gold has support near Rs 51,300-51,500.
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Gold and silver gained on Monday amid weakness in the US Dollar index and ahead of the U.S. Federal Reserve policy meeting. Gold settled at $1,963.70 per troy ounce with a gain of 0.79 percent and silver settled at $27.35 per troy ounce with a gain of 1.64 percent.
Both the precious metals also settled on a positive note in the domestic markets. Gold settled at Rs 51,687 per 10 gram with a gain of 0.72 percent and silver settled at Rs 68965 with a gain of 1.5 percent.
The US Dollar index slipped below the 93 mark again. The US 10-Years bond yield is also struggling below 0.70 percent. Gold and silver get support from continued inflows in Gold ETF in straight nine months and slower mining outputs due to pandemic, suggest experts.
“Weakness in the dollar index also supported prices. Ahead of the U.S. Federal Reserve meeting outcome on Wednesday late night both the precious metals remain volatile and trade in both the directions. Gold is having resistance at $1972-1984 per troy ounce and support at $1955-1940 per troy ounce,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“At MCX, gold is having support at Rs 51500-51330 and resistance at Rs 51800-52000. Silver is having support at $27.00-26.70 per troy ounce and resistance at $27.70-28.00 per troy ounce. At MCX, silver is having support at Rs 68200-67800 and resistance at Rs 69200-69900 levels,” he said.
Jain advises investors to avoid fresh buying at higher levels and wait for some dips for fresh buying near first support levels in both the precious metals.
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Trading Strategy
Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities
International spot gold and silver prices rebounded on Monday tracking the weak US Dollar and hopes of a continuation of the dovish monetary policy by the U.S. Federal Reserve this week.
The U.S. Dollar remained under pressure the whole day after U.S. Treasury Secretary Mnuchin said there still could be a deal with the U.S. Congress for more federal coronavirus-related aid.
Domestic bullion could trade flat this Tuesday, tracking a subdued start in the overseas prices. Technically, MCX Gold October is trading above 21-Daily Moving Average which is placed at Rs 51600 levels.
The upside resistance is at 51900-52200 levels. Support holds at Rs 51400-51150 levels.
Strategy for Gold: Sell Gold October at 51900 with a Stop loss at Rs 52100 & Target at Rs 51500.
Strategy for Silver: Sell Silver December 69000 with a Stop loss at Rs 69700 & Target at Rs 67900.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
COMEX gold trades higher near $1974/oz after a 0.8% gain yesterday. Although gold is still in broad range support from weakness in the US dollar and hopes of central banks dovish stance are supporting the bull case.
However, recovery in the US and global equity markets have capped the upside. ETF investors moved to sidelines awaiting more clarity. Gold may remain range-bound to positive ahead of Fed decision and other central bank meetings later this week.
Disclaimer: 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.
