Gold prices in India continued to dip on Wednesday tracking the muted trend in the international market. On the Multi-Commodity Exchange (MCX), August gold contracts dropped 0.03 per cent lower to Rs 46,543 for 10 grams at 0930 hours. Silver saw a marginal increase on June 30. July silver futures were trading 0.07 per cent higher at Rs 67,277 a kilogram.
In the international market, gold prices edged down on Wednesday, on track for their biggest monthly decline since November 2016. Spot gold eased 0.3% to $1,755.70 per ounce by 0846 GMT, having touched its lowest since April 15 at $1,749.20 on Tuesday. US gold futures fell 0.4% to $1,756.70, according to Reuters.
“Gold prices have witnessed a decline towards two-month lows as investors have grown wary after mixed signals from the Fed on policy normalisation and are awaiting further cues to assess the Fed’s stance going forward. Besides, the dollar index has staged a decent recovery after the Fed’s hawkish tilt earlier this month which is weighing on gold prices,” said Sugandha Sachdeva, vice president — commodity and currency research, Religare Broking Ltd.
“On the other hand, market participants are keeping an eye on the recent surge in Delta variant of the COVID-19 virus across Asia and Europe that may underpin safe haven demand for the precious metal after the recent correction. The dollar’s prevailing strength is also likely to witness a pause amid progress over the US President Biden’s ambitious $1.2 trillion infrastructure package, that should support recovery in the precious metal,” she added.
“The price set up for gold indicates that the metal is consolidating near the key support zone of Rs 46500-46300 per 10 gms after the considerable fall and expected to witness a rebound in the near-term. A retreat looks plausible towards Rs 47500 per 10 gms mark initially, that can extend further towards Rs 48100 per 10 gms mark for the month ahead. On the contrary, a sustained close below the mentioned support could trigger selling pressure, leading the metal lower towards Rs 45,500-45,300 per 10 gms zone,” analyst added.
“This week, investors will be on the lookout for the US non-farm payrolls report for June, due on Friday, for clues on what the Fed might do next. A poll has forecast a growth of 690,000 jobs in June to add to May’s expansion of 559,000. Meanwhile, other data showed that US consumer confidence jumped to its highest level in nearly one and half years in June as growing labour market optimism amid a reopening economy offset concerns are higher inflation,” said Sriram Iyer, senior research analyst at Reliance Securities
“International spot gold and silver prices have started flat to weaker this Wednesday morning in Asian trade. The uncertainty of the monetary policy of the Federal Reserve in regard to inflation and the timeline to taper and raise rates could continue to weigh heavily on some market participants minds. At the same time, some investors are likely anticipating better-than-expected jobs data, which should increase calls for higher interest rates. This would lead to a stronger U.S. Dollar, pressuring gold prices further. However, labour market disappointment should provide short-term support for gold. Technically, LBMA Gold Spot could see a sideways to marginal downside momentum where below $1760 will continue Bearish momentum up to $1752-$1743 levels. Resistance is at $1768-$1775 levels. LBMA Silver below $26.00 level will continue its Bearish momentum & further could see $25.30-$24.90 levels. Resistance is at $26.30-$27.00 levels,” Iyer added.
“Domestic gold and silver prices could start flat to weaker on Wednesday morning, tracking overseas prices. On the domestic front, MCX Gold August has given a breakdown below its support zone near Rs 46,800-46,900 indicating for downside momentum up to Rs 46,450-46,300 levels.If MCX Silver July trades below Rs 67,500 levels it could continue its Bearish momentum up to Rs 66,700-66,000 levels. Resistance is at Rs 67,700-68,300 levels,” he mentioned.
“Gold witnessed sharp fall on Tuesday as prices have knocked the crucial support zone of $1750 an ounce. The vagueness of the FOMC outcome in regards to inflation, dot plot, and raise rates weighs heavily on trader’s and market participants’ minds and technically becoming a sell on rise market. Strong dollar and rising bond yields are acting as inhibitor for gold prices and precious metal now needs some fundamental reason may be in form of employment data to move up,” said Sandeep Matta, founder, TRADEIT Investment Advisor.
“Gold on MCX also cracked yesterday and somehow able to close above 46500 levels. Prices are unsettled by the Fed’s taboo on inflation and market participants are advised to stay cautious either side. Key level for gold August Contract – Rs 46,617. Buy Zone Above – Rs 46,995 for the target of Rs 46,775-46,830. Sell Zone Below – 46600 for the target of Rs 46,330-46,100,” he added.
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