Gold August futures contracts at MCX opened at Rs 72,533 per 10 gram on Tuesday, showing a Rs 500 fall so far this week, while MCX silver September futures contracts traded flat, opening at Rs 93,133/kg, down by Rs 160 in the week.
Gold and silver witnessed profit taking on Monday ahead of the Fed Chairman’s testimony and US CPI data, settling on a weaker note in the domestic as well as the international markets. Gold August futures contract settled at Rs 72,333 per 10 grams with a loss of 0.98% and silver September futures contract settled at Rs 92,614 per kilogram with a loss of 1.00%.
Gold and silver showed profit taking from their highs after last week’s solid gains. Traders cut their long positions ahead of the two-day testimony of the U.S. Fed Chairman before the U.S. Congress and House on U.S. economy and interest rates.
Traders also booked profits in their long positions ahead of the U.S. inflation data. The Chinese Central Bank also halts their gold buying for the second consecutive month, which also pushed precious metals lower.
However, increased possibilities of interest rate cuts in the September policy meeting after soft U.S. job data and weakness in the dollar index could support prices of gold and silver. Today, the US Dollar Index, DXY, was hovering near the 105.95 mark, falling 0.11 or 0.10%.“We expect gold and silver prices to remain volatile this week ahead of the U.S. and Chinese inflation data,” said Manoj Kumar Jain of Prithvi Finmart Commodity Research. Ranges for MCX gold and silver:
- At MCX, gold is having support at 72,040-71,850 and resistance at 72,580-72,920
- MCX silver has support at 92,100-91,400 and resistance at 93,300-94,000.
“We suggest buying gold on dips around 72,040 with a stop loss of 71,800 for the target of 72,650,” Jain added.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)