Gold Rate Today (August 20): Domestic gold futures traded strong as traders awaited minutes of the last Fed meeting for gaining cues on the Fed's likely stance of interest rate. At around 4:45 pm, October Gold futures traded down by 0.68 per cent or Rs 489 at Rs 72,080 per 10 gm. Meanwhile, silver futures rose over 1 per cent or nearly Rs 1,100 to Rs 85,418 per kg.

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Gold price hovered around $2,500 during the early Asian session amid the rising expectation of an interest rate cut by the Federal Reserve (Fed) in September and further US dollar weakness likely to underpin the precious metal in the near term. Fed Chair Jerome Powell’s speech at Jackson Hole could take center stage on Friday.

The yellow metal reached a new all-time high of $2,509 on Friday, and the more dovish comments from the Fed officials this week might lift the Gold price as lower interest rates generally reduce the opportunity cost.

Chicago Fed President Austan Goolsbee stated that the US economy does not show signs of overheating, so Fed policymakers should be cautious about keeping restrictive policy in place longer than necessary, pointed out Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies. 

Outlook for gold 

Qureshi added gold remained steady in yesterday trade with traders looking ahead to take more cues from the Fedspeak, with the Fed’s Raphael Bostic and Michael Barr set to speak this week. On Friday, Fed Chair Powell's speech at the Jackson Hole symposium to offer more hints about the path forward for interest rates.

On the other hand, easing geopolitical risks and risk-on sentiment may cap the upside for gold amid the United States declaring that Israeli Prime Minister Benjamin Netanyahu has accepted a bridging proposal aimed at resolving differences between Israel and Hamas. A de-escalation of tensions in the Middle East would most likely result in the geopolitical risk premium disappearing rapidly and cap the upside in gold price.

How to trade gold and silver on MCX?

Qureshi suggests to buy on dips gold October futures at around Rs 71,600 keeping a stop loss at Rs 71,100 with a target of Rs 72,300 per 10 gm. For silver, the analysts suggests to buy Silver September futures on dips at a price of around Rs 84,300 for a target of Rs 86,300 keeping a stop loss of Rs 83,300 per kg.