Gold futures on MCX were marginally down 0.04 per cent, or Rs 18, at Rs 46,878 per 10 gram. On the other hand, silver futures gained 0.28 per cent, or Rs 177, at Rs 63,470 per kg.
A strong economic data ahead of the Fed meeting next week is raising speculations over early tapering.
Gold is viewed as a hedge against inflation and currency debasement is likely from widespread stimulus. Fed’s tapering could tackle both those conditions, diminishing gold’s appeal.
Ravindra Rao, CMT, EPAT, VP – Head Commodity Research at Kotak Securities, said weakness in the dollar is supporting gold, concerns about the health of the Chinese economy, geopolitical tensions and persisting virus risks.
“However, weighing on price is weaker investor interest, stability in equity markets and continuing debate about Fed’s monetary tightening,” he added.
In the spot market, highest purity gold was sold at Rs 47,255 per 10 gram while silver was priced at Rs 63,081 per kg on Wednesday, according to the Indian Bullion and Jewellers Association.
Spot prices of the yellow metal and silver have remained almost unchanged in the last couple of weeks, thanks to tepid buying action.
Sandeep Matta, Founder, TRADEIT Investment Advisor, said, “The precious metal is likely to be range-bound and trade sideways until the conclusion of the FOMC meeting next week. Market participants are waiting for more clarity on Federal Reserve’s timeline to begin tapering.”
Trading strategy
“We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1,775 and resistance at $1,810 per ounce. MCX Gold October support lies at Rs 46,700 and resistance at Rs 47,200 per 10 gram” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
Global markets
Spot gold was little changed at $1,792.86 per ounce by 0116 GMT. US gold futures were flat at $1,795.00.
Silver was steady at $23.83 per ounce. Platinum rose 0.5% to $951.81, having hit an over nine-month low on Wednesday. Palladium climbed 1.1% to $2,025.52.
