Gold prices (August 28): Gold prices fall taking international cues; MCX gold trades close to Rs 72,000/10gm
Trading close to its all-time in the international markets, gold prices in the domestic markets have tumbled on rising risk-on sentiment.
Gold, silver rate (August 28, 2024): Gold prices taking cues from the international gold price movement traded lower. The sentiment turned cautious as the US PCE data is to be released later this week.
At the time of writing this copy, gold prices on the MCX for October delivery traded down by 0.43 per cent or Rs 311 at Rs 71,811 per 10 gm.
Data in the US and weak dollar continues to support bullion
The U.S. consumer confidence data, released on Tuesday, exceeded expectations, providing support to gold and silver prices.The dollar index declined further due to weak U.S. manufacturing activity, which also buoyed the prices of these precious metals.
Gold prices losing momentum currently as risk-on sentiment gathers steam
Gold prices erased gains after advancing during the North American session amid a risk-on environment and steady US Treasury yields. Investors ignored better-than expected economic data from the United States (US), failing to underpin the already battered Greenback.
Losses in the bullion remain capped as the narrative remained unchanged in the financial markets
Losses in the bullion remain capped as the narrative remained unchanged in the financial markets. This sent US Treasury bond yields tumbling and the US Dollar to a new 12-month low, levels last seen in July 2023, according to the US Dollar Index. The dollar traded 100.55 and slumped around 0.31%, while the US 10-year benchmark note yields remained 3.829%, virtually unchanged.
Gold price outlook
Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies held that gold traders will keep an eye on the upcoming data points including US Prelim GDP & PCE index report due on Friday to determine whether the current upside is sustainable or not.
The data could also be a prelude to the upcoming Nonfarm Payrolls report which could augment the size of rate cuts in next meeting. Overall we may see cautiously positive undertone in day trade while direction in global equities with US tech stock earnings due could keep prices volatile in evening trade, she added.
Revival in Chinese demand for gold also to boost its rate
Rahul Kalantri, VP Commodities, Mehta Equities said according to reports, Chinese demand for gold is expected to revive in the coming months, which could further support precious metal prices. Gold has support at $2,498-$2,478 and resistance at $2,535-$2,551. Silver has support at $29.62-$29.45 and resistance at $30.14-$30.34
Trading strategy in gold/silver
Gold futures for October delivery are adviced to be bought at around Rs 71,900 for a target of Rs 72,500, keeping a stop loss of Rs 71,300 per 10 gm. While for Silver September futures - a buy on dip is suggested at around Rs 85,300 for a target of Rs 87,300 per kg, maintaining a stop loss of Rs 84,300.