Gold, silver price trade subdued as focus shifts to labour data; MCX Gold at around Rs 71,510/10 gm
Gold prices softened in the global markets as focus shifted to the labour data due to be released in the US later this week. On the MCX, gold futures (October) traded down marginally at Rs 71,553 per 10 gm, while silver futures also fell by a marginal 0.01 per cent at Rs 82,451 per kg.
Gold price supported by the rate cut
Gold prices are being supported amid the rate cut expectations by the Federal Reserve.
Recovery in dollar index and treasury yield weighs
The bullion is facing minor correction given the recovery in the dollar index and US 10-year treasury yield.
Escalating geo-political rift to boost gold appeal
Additionally, the ongoing geopolitical tensions in the Middle East might boost safe-haven assets like Gold.
US labor data in focus and set to determine gold direction going forward
The Labor market data for August is seen as pivotal in determining the extent of the interest rate cut, whether it will be 50 basis points or 25 basis points, at the Fed's September meeting.
Traders bet for a lower rate cut as signalled from the data
Traders have made a slight adjustment to their expectations, with the likelihood of a 25-basis-point cut now at 69%, while the chance of a more significant 50-basis-point reduction has decreased to 31%, according to the CME FedWatch tool.
Outlook for gold
Gold could trade subdued with lack of firm direction amid US ISM & August payrolls could remain in focus for the week. Overall with Protests breaking out across Israel in fresh fury on Monday over the government’s failure to secure a ceasefire-for-hostages deal with Hamas could remain a negative trigger for prices, iterates Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies.
Gold price support and resistance
Technically low of August 22 at $2,470 acts as a major support level for the yellow metal. A break below this level could only drag the price further south to $2,432, the low of August 15. The next contention level to watch is $2,372, the 100-day EMA.
On the flip side key resistance levels persists at around $ 2530 – 2540 zone in spot on the weekly basis, added Qureshi.
Trading strategy in gold
The expert advised to buy on dips the October gold futures at around Rs 71,400 for a target of Rs 71,900, keeping a stop loss at Rs 71,100.
Strategy for silver
For September futures, the sell on rise is suggested at a price of around Rs 84,400 for a target of Rs 82,400, keeping stop loss at Rs 85,400.