India Gold February futures slipped in trade on December 23 tracking a muted trend seen in the international spot prices.
On the Multi-Commodity Exchange (MCX), February gold contracts were trading lower by 0.06 percent at Rs 50,050 per 10 gram at 0920 hours. March silver was trading 0.03 percent higher at Rs 66,891 per kilogram.
Experts are of the view that both the precious metal could remain volatile, but dips, if any in Gold, could be used to buy for a target of Rs 50,300 while a stop loss can be placed at Rs 49,550 per 10 gm.
Gold and silver prices dipped on Tuesday amid better than expected US third-quarter GDP data and strength in the dollar index. Downbeat US consumer confidence data also pushed both the precious metals lower.
Gold February futures contract settled at $1870.30 per troy ounce while Silver March futures contract settled at $25.53 per troy ounce. Both the precious metals settled on a weaker note in the domestic markets.
In the final reading of third-quarter GDP, the US Commerce Department said that the economy grew 33.4 percent. The data was slightly better than expected as consensus forecasts were calling for growth of 33.1 percent.
The dollar rose on Tuesday in thin trading, as concerns about a coronavirus variant raging in Britain that has caused lockdowns and travel restrictions have dampened optimism about a US stimulus bill that Congress passed overnight, suggest experts.
“We expect both the precious metals to remain volatile in Wednesday’s session and lower levels of support is expected in both the precious metals due to US stimulus. Gold is having support at $1858-1844 per troy ounce and resistance at $1884-1900 per troy ounce,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“Silver has support at $25.20-24.88 per troy ounce and resistance at $25.84-26.20 per troy ounce at Comex division. At MCX, Gold is having support at Rs 49800-49550 and resistance at Rs 50330-50500 levels. Silver is having support at Rs 66200-65600 levels and resistance at Rs 67500-68300 levels,” he said.
Jain suggests buying in the gold around Rs 49800 with the stop loss of Rs 49550 for the target of Rs 50300, and in the silver around Rs 66200 with the stop loss of Rs 65600 for the target of Rs 67500 levels.
Trading strategy
Sriram Iyer, Senior Research Analyst, Reliance Securities
International gold and silver prices fell on Tuesday as the dollar benefited from safe-haven buying driven by fears over a new coronavirus variant in the UK.
Domestic gold and silver ended weak on Tuesday, tracking weak overseas prices. Meanwhile, a strong US Dollar also weighed on prices on Tuesday.
Domestic bullion could trade flat to marginally higher this Wednesday morning, tracking the international prices.
Technically, MCX Gold February ended near 65-Daily Moving Average at Rs 50000 levels below which could see a downside pressure up to Rs 49800-49500 levels. Resistance at Rs 50300-50500 levels.
MCX Silver March has given a sharp correction from Rs 70000 levels and ended below Rs 67000 levels. Sustained trade below the level could pull prices towards the next support of Rs 66400-65600 levels. Resistance is at Rs 67700-68600 levels.
COMEX gold trades mixed near $1870/oz after a 0.7% decline on Tuesday. Gold is mixed as support from the virus outbreak, US stimulus deal, Brexit uncertainty and US-China tensions is countered by a recovery in US dollar index, vaccine progress, and mixed ETF activity.