Gold Price Today: Yellow metal eyes FOMC outcome; buy for a target of 46,550, say experts

India Gold MCX October futures were trading higher on Tuesday following positive trend seen in the international spot prices.

All eyes are on the outcome of the US Federal Reserve policy meeting. Gold is considered as a hedge against inflation and currency movement.

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“Gold prices had recovered on Monday from an over one-month low on safe-haven demand as China’s Evergrande debt woes fuelled sharp sell-off in stocks worldwide,” said a Reuters report.

On the Multi-Commodity Exchange (MCX), October gold contracts were trading 0.30 percent higher at Rs 46,122 per 10 grams at 0930 hours. September silver futures were trading 0.05 percent higher at Rs 59,639 a kilogram.

Gold and silver showed very high price volatility on Monday amid strength in the dollar index and Evergrande default threat grows in China. Both the precious metals were settled on a mixed note in the international markets.

Gold December futures contract settled at $1763.80 per troy ounce, and silver December futures contract settled at $22.20 per troy ounce. Both the precious metals settled on a mixed note in the domestic markets.

The dollar index extended gain on Monday and reached one-month highs and capped gains of precious metals. Gold prices recovered from their lows on Monday after a sell-off in the global equity markets.

“Growing threat of Evergrande default in China triggered selling pressure in the global equities and supported safe haven buying in gold. The two-day’s U.S. Federal Reserve monetary policy meeting is starting from today and ends with the statement of the Federal Reserve Chairman,” Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research, said.

“Market is expecting that the Federal Reserve could delay its tapering after Evergrande matter comes into the limelight. We expect both the precious metals to remain volatile in today’s session and pressure in global equities could support safe-haven buying in both precious metals,” he said.

At MCX, Gold has support at 46050-45880 and resistance at 46480-46660 and silver is having support at 59100-58800 and resistance at 60100-60700 levels.

Jain suggests buying gold around 46100 with a stop loss of 45880 for the target of 46550 and silver around 59200 with a stop loss of 58700 for the target of 60300.

Technical Indicators:

Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities

International gold spot and futures rebounded on Monday as fears about the solvency of Chinese property group Evergrande sparked a flight to safe-haven assets.

International silver spot and futures extended losses on Monday, tracking the strength of the dollar.

The Dollar continued to show strength against the basket of currencies on Monday amid safe appeal for the greenback and kept upside capped.

Technically, MCX Silver December below 60000 levels could see 59300-58000 levels. Resistance is at 60200-61000 levels.

Bullion Index futures on MCX could start flat on Tuesday morning trade.

Technically, MCXBULLDEX September could trade on Bearish note within the range of 13500-13850 levels.

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

Momentum indicator RSI also indicating the same and creating a strong positive divergence in 4-hour as well as daily chart.

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

October Gold closing price 46278, Support 1 - 46000, Support 2 - 45800, Resistance 1 - 46550, Resistance 2 - 46800.

December Silver closing price 59609, Support 1 - 59000, Support 2 - 58000, Resistance 1 - 60150, Resistance 2 - 60700.

Expert: Sandeep Matta, Founder, TRADEIT Investment Advisor

Gold prices built some speculative interest and closed moderately high amid a selloff in global equity markets on account of Evergrande crisis. The Fed will meet today and begin the September meeting which will be concluded tomorrow.

Market participants hope to gain more clarity as to the timeline in which the Federal Reserve will begin to taper their monthly asset purchases of $120 billion.

Precious metals are light before the FOMC meeting which could be positive for the safe haven. 

Key level for GOLD – 46178

Buy Zone Above – 46180 for the target of 46450-46650

Sell Zone Below – 46170 for the target of 46060-45900