Today’s Gold Price: Yellow metal rises, up 51,600-51,800 can be re-tested
On September 18th, gold prices rose well above the Rs. 51,500 level. Experts say the metal could be re-tested for Rs. 51,600 – 51,800 if it is rolled out.
On the Multi-Commodity Exchange (MCX), gold for October trading rose 0.23 per cent to Rs. 51,572 per 10 grams at 09:20 hours. September Silver Futures traded up 0.28 per cent at Rs. 68,330 per kg.
Both the Sensex and the Nifty 50 showed weakness after the US Federal Reserve meeting.
Gold fell 1.05 per cent to $ 1,949.90 a troy ounce and silver 1.38 per cent to close at $ 27.10 a troy ounce in the Comex division.
Domestic markets also ended weakly. The gold futures contract lost 0.72 per cent to Rs. 51,453 and the Silver Futures contract lost 0.93 per cent to close at Rs. 68,142.
The dollar index gained after the US Federal Reserve revised its economic growth outlook and kept interest rates soft for longer. U.S. unemployment claims have dropped to 8,60,000 compared to the previous 8,84,000 data, but unemployment is still very high.
“We expect both the precious metals could show some rebound in today’s session. Gold prices can test $1,966 – 1,974 per troy ounce again, $1,940 – 1,933 will act as a major support in today’s session,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart said.
On the MCX, if gold exceeds Rs. 51,440, it could test the 51,660 – 51,800 level again, with the 51,220 – 51,100 level likely to serve as major support.
If the silver exceeds Rs. 68,200, it could test the levels again at 68,800 – 69,200, and the negative is likely to act as major support at 67,500 – 67,000 per day. “We suggest sinking in two precious metals in today’s session,” he said.
Sriram Iyer, Senior Research Analyst at Reliance Securities
International bullion prices fell on September 17th due to a lack of clarity from the US Federal Reserve before the stimulus.
Meanwhile, new U.S. unemployment claims were high last week, suggesting that the labor market should stop recovering and reduce losses.
Technically, MCX October gold is close to its 21-day moving average, which is kept below 51,400, which picks up the negative moment to the 51,200 – 50,900 level. The resistance is at 51,600 – 51,750.
The MCX Silver December contract closed below Rs. 69,000 and some trouble will continue if it falls below the 69,000 level in the coming sessions. However, less than 68,500, it continues to side with marginal trouble at 67,300 – 66,000.
Strategy for gold: Sell October gold at Rs. 51,500 with a stop loss at 51,600 and target at 51,200.
Strategy for silver: Sell December silver at Rs. 68,000 with a stop loss at 68,700 and target at 66,900.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities
Comex gold was trading at 95,958, after falling 1.1 per cent the day before. Gold rose on the back of a weaker dollar, disappointing U.S. economic data, loose monetary policy stance by major central banks, and uncertainty about the U.S. fiscal stimulus.
However, ETF flows show weak investor demand. Gold is directionless amid volatility in equities and the dollar, however, may support the evil attitudes of major central banks.