India Gold MCX February futures traded flat on Wednesday with a negative bias tracking muted trend seen in the international spot prices.
On the Multi-Commodity Exchange (MCX), February gold contracts were trading lower by 0.58 percent at Rs 48,856 for 10 grams at 0920 hours. March silver was trading 0.57 percent lower at Rs 66,156 a kilogram.
Experts are of the view that the precious metal which has slipped below 49000 could get some support around Rs 48,800. Investors can use the dip for a target of Rs 49,300 levels.
Gold and silver traded steady on Tuesday in the international markets. Gold February futures contract settled on a slightly weaker note at $1850.90 per troy ounce and Silver March futures contract settled at $25.54 per troy ounce.
Price action has been choppy and two-sided this week in both the precious metals ahead of the U.S. Federal Reserve meeting outcome later today.
“The FOMC meeting outcome will give directions to both the precious metals. The market is expecting a dovish stance of FED on the economy with continuing fiscal stimulus and lower interest rates,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“We expect both the precious metals could get support from the possible dovish FED and weakness in the dollar index. At MCX, Gold has support at Rs 48,920-48,800 and resistance at Rs 49,330-49,580 and silver has support at Rs 65,900-65,500 and resistance at Rs 67,100-67,800 levels,” he said.
Jain suggests buying in the gold on dips around 48800 with a stop loss of 48550 for the target of 49300 and in the silver around 66000 with the stop loss of 65400, and a target of 67200.
International gold and silver prices rose on Monday as the dollar and yields remained under pressure, with investors eyeing a dovish U.S. Federal Reserve and a big stimulus package under U.S. President Joe Biden’s administration.
However, prices corrected on Tuesday as a slightly firmer dollar and uncertainty over a U.S. stimulus package kept bullion under pressure, with investors awaiting cues on future monetary policy decisions from the U.S. Federal Reserve.
Domestic gold and silver ended flat on Monday. Indian markets are shut on Tuesday on account of Republic Day holiday.
Domestic bullion could trade flat-to-marginally lower this Wednesday morning, tracking the international prices.
Technically, MCX Gold April is holding a resistance near 49500 levels where its immediate support is at 48900 levels. It could trade within these ranges.
MCX Silver March is trading near 66500 level and above which will continue its bullish rally up to 67200-67900 levels. Support is at 65800-65000 levels.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
COMEX gold trades 0.3% lower near $1845/oz after a 0.2% decline yesterday. Gold is pressurized by increasing debate about the US stimulus package and position squaring ahead of the Fed’s monetary policy meeting.
ETF outflows also show a lack of investor interest. However, supporting price is rising virus cases and drop in bond yields and rise in Chinese imports last month.