Gold October future contracts at MCX opened on Wednesday at Rs 69,500 per 10 gram, which is up by nearly 0.50% or Rs 322 while silver September futures contracts were up by 0.85% or Rs 702, trading at Rs 83,361/kg.
Gold prices surged by nearly 1.3% or Rs 900/gm in two days while silver prices increased by 2.5%, going up by nearly Rs 2,100/kg.
Gold prices held steady on Wednesday and were headed for a monthly gain on rising optimism surrounding U.S. rate cuts, while focus shifted to the Federal Reserve policy verdict due later in the day.
“The domestic yellow metal MCX gold traded in a tight range and closed with formation of small positive candle on daily chart suggesting consolidation may continue,” said domestic research firm Way2Wealth Brokers.
Gold prices in India fell last week due to customs duty cuts announced by the government in the Union Budget 2024 and concerns over demand in China. Better-than-expected US Q2 GDP and jobless claims data also exerted downward pressure on gold rates.At the conclusion of the Fed’s two-day meeting later on Wednesday, expectations are that the U.S. central bank will hold rates steady and policymakers will lay the groundwork for a September rate cut. The U.S. rate futures market has fully priced in a 25-basis-point cut in September. Non-yielding bullion tends to thrive in a low interest rate environment.Today, the US Dollar Index, DXY, was hovering near the 104.37 mark, falling 0.18 or 0.17%.Traders are likely to also keep an eye on the ADP employment report due later in the day and Friday’s U.S. payrolls report. Data on Tuesday showed that U.S. job openings, a measure of labour demand, had dropped 46,000 to 8.184 million by the last day of June.
“On the daily chart, MCX Gold August is trading close to its trend line support and has formed a Bearish Engulfing candlestick pattern, signaling potential weakness. It is currently trading below its 21 and 50-day EMAs, which indicates further downside potential. The RSI is showing negative divergence, further suggesting a possible decline. Resistance levels are around 71,500 and 71,900, while support levels are around 70,700 and 70,082,” said Neha Qureshi Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies.
Ranges for gold by Way2Wealth Brokers:
- On the higher side the resistance is at 68790/69815/70700/71475 levels.
- On the downside, the support for the MCX gold is seen at 67940-700/66500-200/65850-65000 levels.
“Technically the short trend on gold is likely to remain in consolidation mode and traders are advised to trade with strict stoploss as volatility may remain high,” added Way2Wealth Brokers.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)