Gold fell on Thursday after a firmer dollar index (DXY) and Fed July FOMC minutes triggered mayhem on the Street due to expectations that the Federal Reserve would carry on with its policy tightening.
The DXY was trading with a positive bias at 103.54 against a basket of six top currencies, making the yellow metal less appealing to investors and traders.
Minutes for the Fed’s July 25-26 meeting showed “some participants” citing the risks to the economy of pushing rates too far even as “most” policymakers continued to prioritize the battle against inflation, according to minutes of the session, Reuters reported.
“The US economy is far from slowing down as Housing stats rose 3.9%, industrial production grew by 1% and Manufacturing production advanced by 0.5% during the month of July. The dollar index rallied to two month high of 103.59 on Thursday as it becomes evident from the recent data that the Fed will continue to go with ‘higher for longer’ interest rates which will further fuel a rally in the dollar index to test resistance of 104 in coming sessions,” Mohammed Imran, Research Analyst at Sharekhan said.
He sees gold prices to remain under pressure due to rising US bond yields, strengthening the dollar on prospects of the hawkish Fed.
“Gold prices could see some buying interest on haven appeal if the US lends are being downgraded by the rating agencies, but the overall trend remains bearish in the yellow metal,” Imran said while putting the support at $1,885 – $1,875 and resistance at $1,915 – $1,930.
Today, the MCX October gold futures were trading with losses at Rs 58,447 per 10 grams on the MCX in the opening trade, down Rs 234 or 0.40%. Meanwhile, September Silver futures were trading at Rs 69,461, down Rs 261 or 0.37%. On Wednesday, Gold futures ended with losses of Rs 285 per 10 grams while Silver futures fell by Rs 232 per kg. Click to know more On the Comex, Gold futures were trading at $1,923 per troy ounce on Thursday, down $5.30 or 0.27% while Silver futures were trading at $22.510, down $0.025 or 0.110%.
On the daily technical charts, bullion was trading in the oversold zone, Amit Khare Associate Vice President at Ganganagar Commodity Limited (GCL) Broking said, expecting a short covering rally soon. The analyst noted that the momentum indicator RSI was also indicated the same so the traders are advised to make fresh buy positions in gold and silver futures near the support level of Rs 69,500 – Rs 69,000 with a stop loss at the first support level. Profit booking is advised near the resistance levels of Rs 59,000 – Rs 59,200. Click to know more
Intraday Trading Strategy by Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies
– Sell MCX October Gold futures at Rs 58,750 with a stop loss of Rs 59,000 and a price target of Rs 58,400.
– Sell MCX September Silver futures at Rs 69,900 with a stop loss of Rs 71,200 and a price target of Rs 68,000.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)