Gold traded lacklustre while silver was up with mild gains in early trade the domestic futures trade on Citizenship Day in light of weak global cues.
In the previous session, gold and silver prices fell after upbeat US economic data and strength within the dollar index.
The dollar traded near three-week highs, denting the appeal of gold as a safe-haven asset after the economic data within the US showed healthy economic revival.
Apart from global cues, strong gains in riskier equities also weighed on gold prices. Market benchmark the Sensex hit a fresh record high of 59,582.36 within the early deals.
On MCX, October gold was trading 0.03 percent lower at Rs 46,064 per 10 gram at 0940 hours but December Silver was 0.27 percent up at Rs 61,239 per kg.
“Gold and silver prices crashed on September 16. Gold prices hit a four-week low and silver prices hit a five-week low. Stronger than expected US economic data supported the dollar index and triggered selling in both the valuable metals,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, acknowledged .
Weighing on gold is upbeat US economic data which strengthened the case for Fed’s monetary tightening. However, supporting price is rising inflation concerns, persisting virus risks, concerns about the health of the Chinese economy and increased geopolitical tensions.
ETF inflows also showed some buying interest at lower levels however the pace was modest. Gold’s sharp fall has dented market sentiment however we believe that market reaction to US data was exaggerated and price may stabilize near the $1,750/oz level.
Now, both metals are trading in an oversold zone which suggests any time we will see an honest short-covering rally in bullion.
Momentum indicator RSI also indicating an equivalent , so positional traders are advised to make fresh buy positions especially in gold in small dips near Rs 45,900-45,700. Traders should specialise in important technical levels given below for the day:
October gold support 1: Rs 45,750 | Support 2: Rs 45,450 | Resistance 1: Rs 46,400 | Resistance 2: Rs 46,700.
December silver support 1: Rs 60,200 | Support 2: Rs 69,400 | Resistance 1: Rs 62,000 | Resistance 2: Rs 62,750.
The safe-haven metal has fallen into the zone and will anytime break the Rs 45,000 level if the amount of $1,745/oz within the US aren’t respected.
Key level for gold: Rs 46,268
Buy zone: Above Rs 46,275 for the target of Rs 46,400-46,550
Sell zone: Below Rs 46,250 for the target of Rs 45,800-45,600
Manoj Dalmia, Founder and Director, Proficient equities Private limited
The overall trend is weak for now. $1,750 may be a very crucial support for gold.
Buy zone: Rs 46,100 for the target of Rs 46,700-46,800
Sell zone: Below Rs 45,700 for the target of Rs 45,400-45,200
Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research
We expect both the valuable metals to stay volatile in today’s session and will show some price retracement from lower levels.
Gold has support at $1,745-1,720 per ounce and resistance at $1,772-1,784 per troy ounce; silver has support at $22.55-22.30 per ounce and resistance at $23-23.40 per ounce .
On MCX, gold has support at Rs 45,800-45,550 and resistance at Rs 46,330-46,600; silver has support at Rs 60,500-59,900 and resistance at Rs 61,800-62,400 levels. we propose buying silver around Rs 61,000 with a strict stop loss of Rs 60,600 for the target of Rs 61,800.