Gold futures on MCX were down 0.56 per cent, or Rs 265, at Rs 47,347 per 10 gram. Silver futures declined 0.65 per cent, or Rs 411, at Rs 63,063 per kg.
Gold prices traded under pressure on dollar recovery ahead of US Jackson Hole meeting where the market is expecting fresh cues on Fed stance on asset tapering and change in interest rates. The strong equity indices may also add pressure to the prices for the day.
Focus will be on Jerome Powell’s speech at the Fed’s annual economic symposium at Jackson Hole, Wyoming, later in the week, whether he gives a timeline on the stimulus withdrawal.
Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities, said gold fell after failing to build on the gains above $1,800/oz level. Weighing on gold is some recovery in the US dollar index after recent losses, improved risk appetite and continuing ETF outflows.
“However, supporting price is mixed US economic data, persisting virus risks and geopolitical tensions relating to Afghanistan. Gold has slipped back below $1,800/oz on Fed uncertainty. However, increasing risks to the global economy may keep prices supported,” he added.
Gold jewellery varies in price across India, the second-largest consumer of the metal, due to excise duty, state taxes, and making charges.
In the spot market, highest purity gold was sold at Rs 47,710 per 10 gram while silver was priced at Rs 63,450 per kg on Tuesday, according to the Indian Bullion and Jewellers Association.
The price of the yellow metal in the spot prices rose more than Rs 1,500 in the last two weeks, whereas silver has remained flat, gaining only Rs 600, during the period.
Trading strategy
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,780 and resistance at $1,810 per ounce. MCX Gold October support lies at Rs 47,200 and resistance at Rs 47,800 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold fell 0.4% to $1,796.03 per ounce by 106 GMT, while US gold futures fell 0.6% to $1,797.50.
Silver eased 0.4% to $23.73 per ounce, while platinum fell 0.5% to $1,005.97. Palladium was down 0.6% to $2,459.89.
