India Gold October futures edged lower on Thursday following muted trend seen in the international spot prices after the U.S. Federal Reserve signaled the easing of its monthly bond purchases by next year.

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Spot gold was trading at $1,762.33 per ounce, said a Reuters report. Gold is often considered a hedge against higher inflation, but a Fed rate hike would dull bullion’s appeal, it said.

 

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On the Multi-Commodity Exchange (MCX), October gold contracts were trading 0.63 percent lower at Rs 46,378 per 10 grams at 0930 hours. September silver futures were trading 1 percent lower at Rs 60,573 a kilogram.

Gold and silver extended gains on Wednesday ahead of the Federal Reserve meeting outcomes. Both the precious metals settled on a positive note in the international markets.

Gold December futures contract settled at $1778.80 per troy ounce, and silver December futures contract settled at $22.91 per troy ounce. Both the precious metals settled on a positive note in the domestic markets.

Gold and silver prices traded firm on Wednesday but witnessed profit booking after the US Federal Reserve meeting outcome. The central bank left policy rates unchanged and continued its bond-buying program but as per the latest economic projections, it sees the first potential interest rate hike in 2022.

“The U.S. Federal Reserve open market committee said if the economic progress continues then it will start easing its bond-buying program. Gold prices could test its support level of $1750 again,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, said.

“Gold has support at $1762-1750 per troy ounce and resistance at $1792-1800 per troy ounce; silver is having support at $22.66-22.20 per troy ounce and resistance at $23.20-23.55 per troy ounce,” he said.

Jain further added that at MCX, Gold has support at 46440-46180 and resistance at 46800-47100 levels; silver has support at 60500-59900 and resistance at 61600-62100 levels.

“We suggest selling gold below 46700 with a stop loss of 46920 for the target of 46300 and silver below 61000 with a stop loss of 61600 for the target of 60000,” he said.

Technical Indicators:

Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities

International gold & silver spot and futures fell on Wednesday after the U.S. Federal Reserve signalled a sooner-than-expected interest rate hike and easing of its bond purchases by the middle of next year.

Domestic gold and silver futures ended higher on Wednesday ahead of the U.S. Federal Reserve meeting.

Bullion Index futures ended in the green tracking firm domestic gold and silver futures close on Wednesday.

The U.S. Dollar and the benchmark treasury yields rose after the Fed meeting and weighed on prices.

The Federal Reserve said it will likely begin reducing its monthly bond purchases as soon as November and signalled interest rate increases may follow more quickly than expected.

Technically, MCX Gold October could see sideways to marginal downside momentum up to 46150-45900 levels. Resistance is at 46400-46550 levels.

MCX Silver December could test the support of 60000-59300 levels. Resistance is at 62000-63200 levels.

Expert: Dr. Ravi Singh, Founder and Director, DRS Advisory

Gold on MCX closed on a positive note as fears of a spillover from China Evergrande's debt woes drove demand for safe haven.

Buy Zone Above – 46700 for the target of 47500
Sell Zone Below – 46400 for the target of 45800

Bullion Index futures on MCX could start gap down on Thursday morning trade.

Technically, MCXBULLDEX September could trade on Bearish note within the range of 13700-14050 levels.

Expert: Sandeep Matta, Founder, TRADEIT Investment Advisor

The gold prices reversed its entire earlier gains after the US Fed chairman mentioned gradual start of tapering its $120 billion monthly asset purchase.

The exact timeline is still not announced however acknowledging the economic recovery and vaccination drive fed has been laying out the carpet for a tapering announcement in coming months.

The outlook for gold is negative and becoming a purely skilled traders’ play with pivotal price points.

Key level for GOLD – 46663

Buy Zone Above – 46690 for the target of 46798-46914
Sell Zone Below – 46650 for the target of 46400-46135

Expert: Amit Khare, AVP- Research Commodities, Ganganagar Commodities Limited

Traders are advised to create fresh buy positions in Gold and Silver in gap down opening, traders should focus on important technical levels given below for the day:

October Gold closing price 46672, Support 1 - 46500, Support 2 - 46250, Resistance 1 - 46800, Resistance 2 - 47000.

December Silver closing price 61180, Support 1 - 60700, Support 2 - 60000, Resistance 1 - 61630, Resistance 2 - 62260.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)