Gold prices in India traded lower on the Multi Commodity Exchange (MCX) Thursday following weakness in international spot prices on a stronger US dollar. Silver prices also declined over half a percent.
At 10:50 am, gold futures for August delivery fell 0.42 percent to Rs 46,876 per 10 grams as against the previous close of Rs 47,072 and the opening price of Rs 46,950 on the MCX. Silver futures traded 0.62 percent lower at Rs 67,510 per kg. The prices opened at Rs 67,707 as compared to the previous close of Rs 67,932 per kg.
International gold was subdued on Thursday, as a stronger dollar made bullion more expensive for holders of other currencies, while investors digested mixed signals from Federal Reserve officials on rate hike and awaited more US data to gauge inflationary pressures, said a Reuters report.
Spot gold was down 0.2 percent at $1,774.96 per ounce. US gold futures fell 0.4 percent to $1,776.10.
Meanwhile, the dollar index held firm below an 11-week high against its rivals.
Gold is often seen as a hedge against inflation, though a rate hike by the Fed will increase the opportunity cost of holding bullion and dull its appeal.
“A stronger dollar and fast pace of vaccination in the US is weighing on the precious metal prices. The physical demand for gold is improving. The investors are on a wait and watch mode as the focus now shifts key economic data,” said Ajay Kedia, Director, Kedia Advisory.
Gold is expected to remain rangebound and Kedia suggests buying gold on dips.
“On MCX, support for gold is seen at Rs 46,520 and resistance at Rs 47,280. Silver may find support at Rs 66,600 and resistance at Rs 68,850,” he said.
Investors now await US jobless claims expected later in the day, the US producer price inflation data due on Friday and US non-farm payrolls due next week.
“Gold bulls are trying to stabilize the market as the prices are seeing some technical buying momentum after the massive selling pressure. Prices are consolidating from past few days around $1,780 levels along with the formation of higher lows from last four days,” said Sandeep Matta, Founder, TRADEIT Investment Advisor.
“It’s a cautious market case across all the asset class and traders and investors needs to have patience, discipline and should follow proper risk management. Gold seems not in hurry to cross the $1,800 an ounce mark in the global market and seems rangebound behaviour is like to continue for some time,” Matta added.
Meanwhile, strength in the Indian rupee amid buying in the domestic equity market further pressurized the precious metal prices.
“Gold and Silver are trading near oversold zone. Momentum indicator RSI is also creating positive divergence on 4 hourly chart. So traders are advised to go for long in gold and silver near support levels and traders should also focus on important technical levels for the day,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodities.
August Gold: Support 1 – Rs 46,850, Support 2 – Rs 46,500; Resistance 1 – Rs 47,270, Resistance 2 – Rs 47,550.
July Silver: Support 1 – Rs 67,300, Support 2 – Rs 66,500; Resistance 1 – Rs 68,500, Resistance 2 – Rs 69,100.
Here are gold rates across major cities:
Here are silver rates across major cities:
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