Domestic gold prices registered mild gains on Wednesday tracking global benchmarks as strength in the dollar made the yellow metal less attractive for holders of other currencies. A rise in Indian equities also kept investors’ attention away from safe-haven bets.On Multi Commodity Exchange (MCX), gold and silver futures were slightly up in early deals. At 9:14 am, MCX gold futures for October delivery traded with a gain of Rs 86 or 0.18 percent at Rs 47,025 per 10 grams, compared with their previous close of Rs 46,939 per 10 grams.Silver followed suit, with the December contract trading up by Rs 34 or 0.05 percent at Rs 64,655 per kilogram at the time, compared with its previous close of Rs 64,621.
Globally, gold prices steadied, a day after the yellow metal slipped 1.6 percent, amid gains in the dollar and a rise in US Treasury yields. Spot gold was last seen trading up 0.2 percent at $1,826.75 per ounce, but US gold futures eased 0.3 percent to $1,828 per ounce. Silver rose 0.1 percent to $24.32 an ounce.The dollar index — which gauges strength in the greenback against six other currencies — hovered near a one-week peak and was last seen steady at 92.54, up 0.03 percent.
The benchmark 10-year Treasury note rose to as high as 1.385 percent on Tuesday for the first time since mid-July.All eyes were on US President Joe Biden’s six-pronged strategy, due to be unveiled on Thursday, to tackle the spread of the Delta variant of Covid-19.Meanwhile, the recent strength in the rupee back home amid continuous buying in the equity market is pressurising the precious metal prices.
Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart, said gold and silver may rebound again on any signs of a cooling US economy in the Federal Reserve’s Beige Book report.The US central bank is due to release the Beige Book report — a summary of commentary on current economic conditions published by it eight times a year — on September 8. “Precious metals are not taking risk premiums of geopolitical tensions as of now but increasing positions by hedge funds are indicating that both the precious metals could rebound again.
Despite strength in the dollar index, gold and silver prices could find support at lower levels. Rising Covid cases in the US and geopolitical tensions in Afghanistan could support prices,” he said.Jain sees support to come in at Rs 46,770-46,550 levels for MCX gold futures, and resistance at Rs 47,100-47,330. For the white metal, he has pegged support at Rs 64,100-63,700 and resistance at Rs 65,000-65,800.According to Sandeep Matta, Founder of TRADEIT Investment Advisor, strength in the US currency is the key reason behind the recent profit booking in the precious metal. Bears are at advantage and it is becoming a sell-on-rise market until the rate crosses and sustains the $1,840 level in the US, he said.
Time to take positions?
Manoj Dalmia, Director and Founder of Proficient Equities, sees Rs 47,224 as a key level for the near-month gold futures.He has suggested buying above Rs 47,500 for a target of Rs 47,550-48,200 and selling below Rs 46,879 for a target of Rs 46,879-46,130.Matta sees Rs 47,079 as a key level for domestic gold. He suggests buying above Rs 47,080 for a target of Rs 47,200-47,425, and selling below Rs 47,060 for a target of Rs 46,800-46,700.Jain recommends buying gold futures on dips to around Rs 46,770 for a target of Rs 47,300 with a stop loss at Rs 46,500.Amit Khare, AVP-Research Commodities at Ganganagar Commodities, sees support for MCX October futures at Rs 46,600, and then Rs 46,300. He expects the contract to meet resistance at Rs 47,100, followed by Rs 47,300.For silver, he has pegged support at Rs 64,000, followed by Rs 63,500, and resistance at Rs 65,200 and Rs 65,750 levels.