Gold and silver prices recovered on Friday morning as international gold prices recovered from an over 3% slide in the previous session. The market reacted to rising US jobless numbers and Federal Reserve‘s concern economic recovery.
Analysts said that market participants today will keep an eye on the preliminary manufacturing and service PMI (purchasing managers index) number expected from major economies, which if reported weaker than expectations, could lend further support to bullion during the day.
Gold futures on Multi-Commodity Exchange (MCX) for October opened at Rs 52,160 per 10 gm, a shade over yesterday’s closing of Rs 52,151 per 10 gm. MCX September silver opened on a positive note at Rs 68,397per kg compared to yesterday’s close of Rs 67,595 per kg.
At around 12.30 pm MCX October gold was trading at Rs 52,205 per 10 gm while silver was trading at Rs 68,355 per kg.
“An unexpected rise in jobless claims last week, volatility in equities, increasing worry over rising Covid cases and other uncertainties are supportive for metal prices although rebound in yields from the lows and rise in dollar index limited gains for the same. On other hand, to and fro comments between the US and China continue to keep the market cautious. No new high-level trade talks are scheduled but both the sides remain in touch about complying with the phase one deal,” said Navneet Damani, vice-president (commodities research) at Motilal Oswal Financial Services.
“Additionally, mounting tensions between the US and Iran also lent support following the US announcement to restore full sanctions on Iran,”said Sriram Iyer, senior research analyst at Reliance Securities.
Anuj Gupta, deputy vice president (commodities and currency research) at Angel Broking said: “Today we are expecting an upside movement in bullion on the back of weakness in dollar due to unexpected rise in US Jobless data. The US Fed’s warning of a slowdown in hiring due to weakness in the US economy will also impact bullion prices.”
Prices are likely to remain firm, said Tapan Patel, senior analyst (commodities) at HDFC Securities said “Gold prices are expected to keep the firm trading range in the coming week ahead of the Jackson Hole meeting as investors will eye for the comments from US Fed Chair Jerome Powell. MCX Gold October future may trade sideways to up with resistance at Rs 53,500 per 10 gm and support at Rs 51,200 per 10 gm,” he said.
Patel added that silver prices may get additional support from base metals along with a boost from the safe haven demand. “MCX Silver prices are expected to trade in current range with bullish bias with support at Rs 65,000 per kg and resistance at Rs 72,000 per kg,” he said.