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Gold Price Today: Yellow metal futures dip below Rs 46,700 mark; should you take positions?

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Domestic gold and silver futures declined amid strength in the dollar overseas, making bullion less attractive for holders of other currencies.

Gold Price Today: Yellow metal futures dip below Rs 46,700 mark; should you take positions?
Domestic gold and silver fell on Tuesday amid strength in the dollar overseas, making the yellow metal less attractive for holders of other currencies. A lacklustre trend in the equity market, however, somewhat supported the safe-haven appeal of precious metals, keeping the losses in check.
In afternoon deals, near-month gold and silver futures traded half a percent lower. The December gold futures on MCX traded Rs 216 higher at Rs 46,671 per 10 grams. The silver contract for the month was down Rs 300 at Rs 60,653.
Globally, gold and silver rates fell as the dollar benefited from subdued risk sentiments. Analysts awaited jobs data from the US due on Friday for more clarity on the Federal Reserve’s take on stimulus and interest rates going forward.
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Spot gold was last seen trading down 0.8 percent at $1,755.7 per ounce. US gold futures were down 0.7 percent at $1,755.9 an ounce.
Silver was down 0.7 percent at $22.5 per ounce.
The dollar index - which tracks the greenback against six other currencies - rose as much as 0.3 percent to 94.1, making the yellow metal more expensive for buyers holding other currencies.
The rupee weakened by five paise to 74.17 against the dollar amid weakness across its Asian peers.
The dollar index - which gauges the greenback against six peers - rose
0.1 percent to 94.1 in early Asian trade, rebounding from its lowest level since September 29.
Back home, equity benchmarks Sensex and Nifty50 struggled in a narrow range around the flatline, as gains in auto and oil & gas shares were offset by losses in pharma and PSU banking names.
Typically, weakness in equities increases the allure of gold as a safety bet.
Gold is often considered a hedge against higher inflation, but a Fed rate hike would increase the opportunity cost of holding gold, which pays no interest.
Manoj Kumar Jain, Director, Head-Commodity and Currency Research at Prithvi Finmart, expects both precious metals to remain volatile but hold their support levels this week.
He suggests a 'buy-on-dips' strategy in both gold and silver.
MCX gold futures have support at Rs 46,660-46,480 and resistance at Rs 47,050-47,220, he said. For silver, he sees support at Rs 60,600-60,100 and resistance at Rs 61,400-61,900. "We suggest buying gold on dips to around Rs 46,660 for a target of Rs 47,100 with a stop loss at Rs 46,380," Jain said.
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