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    Gold and silver rise as dollar dips — analysts say gains could be short-lived

    Gold and silver rise as dollar dips — analysts say gains could be short-lived

    Gold and silver rise as dollar dips — analysts say gains could be short-lived
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    By Sandeep Singh   IST (Updated)

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    Gold and silver price today: Precious metal rates rose on Thursday as weakness in the greenback overseas made them more attractive to holders of other currencies. However, gains on Dalal Street — which aided investors' appetite for risk — kept the upside in gold and silver in check.

    Gold and silver rates edged higher on Thursday tracking global benchmarks, as the dollar eased from a 20-year peak in some respite for holders of other currencies. Gains in domestic equities, however, supported the risk-on sentiment of investors, limited the appeal of precious metals as an investment bet.
    MCX gold futures — due for a delivery on August 5 — rose by as much as Rs 330 or 0.7 percent to Rs 50,830 apiece, snapping a two-day fall.
    Silver followed suit, with the white metal's contract (September 5) climbing to as high as Rs 57,177 per kilogram, up by Rs 451 or 0.8 percent from its previous close.
    Globally, gold rose by $2.8 or 0.2 percent to $1,742 per ounce in the spot market, and silver 0.5 percent to $19.3 an ounce.
    Analysts warned that the pause in the greenback may be temporary.
    The dollar index — which gauges strength in the greenback against six peers — eased 0.3 percent to 106.5, not far from a 20-year high of 107.3 hit on Wednesday. 
    "FOMC minutes reaffirmed that the central bank will continue with rates hikes to get inflation under control. Also supporting the price of gold are lower bond yields and worries over global growth," said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.
    "Gold has fallen sharply in last few days as market players preferred US dollar as a safe-haven asset. The sell-off has dented market sentiment and the general bias may be on the downside unless US dollar corrects significantly or we see a recovery in commodities at large,” he added.
    Should you enter gold now?
    Manoj Kumar Jain, Head-Commodity and Currency Research at Prithvi Finmart, recommends buying gold above Rs 50,500 with a stop loss at Rs 50,330 on a closing basis for a target of Rs 50,800.
    He also suggests going long on silver around Rs 56,400 on a closing basis for a target of Rs 57,500 with a stop loss at Rs 55,800.
    He sees support for both precious metals at the following levels:
    SupportResistance
    Spot gold$1,724-1,710$1,750-1,762
    Spot silver$18.88-18.65$19.45-19.70
    MCX goldRs 50,330-50,150Rs 50,720-50,880
    MCX silverRs 56,200-55,800Rs 57,220-57,700
    The rupee gained by 20 paise to 79.10 against the greenback on Thursday, amid weakness in the US currency overseas and gains in domestic equities.
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