Gold prices in India remained at a three-month low in view of a weak global trend in the precious metals. Gold futures fall on MCX 50,050 per 10 grams in early trade, before recovering slightly 50184. Silver above the edge 52807 per kg. Gold remained weak in the international markets and was trading below the key level of $1,700 an ounce. A rally in the US dollar and strong US bond yields put pressure on the precious metals. Traders await key US jobs data, due out later today, which could provide further clues on the size of the Federal Reserve’s next interest rate hike.
Ravindra Rao, VP – Head Commodity Research, Kotak Securities said: “COMEX Sleep Trading changed little near $1710/oz as the US Dollar index and bond yields stalled after the recent rise. Market players are now positioning the US non-farm payrolls report which could help to gauge expectations for the Fed’s monetary policy. ,
“The recent move suggests that one jobs reading may not be enough to reverse the Fed’s tough stance, so we may not see much of a response until the jobs report disappoints significantly.” “There may be some correction in the borrowing support of the US Dollar largely as a result of a weak report. Therefore, caution should be exercised in creating fresh shorts.”
Traders anticipate another huge 75 basis point increase in the Fed’s next policy decision meeting September 20-21 to contain price pressure. So far this week, gold has broken more than 2 percent in the international markets.
Gold Price Technical Outlook
Rahul Kalantri, VP Commodities, Mehta Equities Ltd. said: “The yellow metal remains firmly in the red for the third week in a row and is on a loss-making track for the fifth consecutive month, down nearly 12% since April. Fundamentals remain negative. Metals, while bearish technical studies add to the weak structure.
However, “due to oversold conditions, some amount of consolidation may be observed” gold prices going forward. Euro area inflation hit a record 9.1% in August and so the ECB may also start raising interest rates to control inflation. However, US ADP non-farm employment data released on Wednesday was lower than expected and supported gold prices lower.
“Gold has support at $1698-1684, while resistance is at $1722-1735. Silver has support at $17.55-17.40, while resistance is at $18.25-18.42. Gold has support in rupee terms. 50,050–49,840, while resistance is at 50,520–50,740. Silver has support at Rs 52,550-52,120, while it is at resistance. 53,580–53,910.”
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