Gold price in India saw a huge drop on Monday on the back of low US dollar index. The yellow metal remained under pressure since last week. The price fall on Monday after US Federal Reserve Chairman Jerome Powell indicated that the US central bank plans to cut its asset purchases later this year. On the Multi-Commodity Exchange (MCX), October gold contracts slumped 0.20 per cent to Rs 47,441 for 10 grams at 0930 hours on August 30. Silver price remained flat on Monday. The precious metal price rose 0.02 per cent to Rs 64,050 on August 30.
In the international market, gold prices rose to a near four-week high on Monday after US Federal Reserve. Spot gold was steady at $1,814.86 per ounce, as of 0312 GMT, after hitting its highest since Aug. 4 at $1,820.50 earlier in the session. US gold futures GCv1 edged 0.1 per cent lower to $1,817, according to Reuters. Lower US interest rates put pressure on the dollar and bond yields. After US Fed Chief’s comment at the Jackson Hole, dollar index dropped to a two-week low against its rivals. It made safe-have asset less expensive for holders of other currencies.
“Federal Reserve Chair Jerome Powell also indicated that he still regards a spike in inflation as temporary and offered no signal on when the central bank plans to cut its asset purchases beyond saying it could be this year. Moreover, rising coronavirus cases could drive expectations that the US Federal Reserve might delay tapering of economic support and lent support to gold. Slightly weak US business activity in August also lent support to bullion. The dovish speech by the Fed Chair Jerome Powell could continue to push prices higher next week, said Sriram Iyer, senior research analyst at Reliance Securities for your reference.
“On the domestic front, MCX October has settled above a pivotal level at Rs 47,500 which could push prices towards the resistance at Rs. 47800 and Rs 48,000 and a break above both resistances will push prices to Rs 48,300 levels. On the other hand, a break below Rs 47,500 prices could move back to the supports at Rs 47,250, Rs 47,000 and Rs 46,750, Iyer said.
“Gold and silver are showing strength in daily chart and Momentum indicator RSI creating a strong positive divergence in Silver in daily as well as four hourly chart, any dips is a opportunity to create fresh long positions in bullions, fundamentals also in support of bullions. So traders are advised to create fresh buy positions in gold and silver near given support levels, traders should also focus important technical levels given below for the day: August Gold closing price Rs 47,538, Support 1 - Rs 47,100, Support 2 - Rs 46,700, Resistance 1 - Rs 47,750, Resistance 2 - Rs 48,000. September silver closing price Rs 64,063, Support 1 - Rs 63,100, Support 2 - Rs 62,500, Resistance 1 - Rs 65,000, Resistance 2 - Rs 66,000, said Amit Khare, AVP- research commodities, Ganganagar Commodities Limited.
“The precious metal registered immediate gain and breakout above $1800/oz after fed chairman sounded more cautious than other Fed officials on tapering, mentioning that the central bank could start reducing its $120 billion in monthly bond purchases this year. Powell’s comments created some selling in US dollar which has been positive for the gold. Bullish sentiments in gold have picked up in Indian markets also where safe have has given closing above Rs 47,500. The near-term outlook is expected to remain positive as Powell’s comments have breathed new life in the precious metal market. Key level for gold August Contract – Rs 47,313. Buy Zone Above – Rs 47,320 for the target of Rs 47,807-48,000. Sell Zone Below – Rs 47,300 for the target of Rs 47,050-46,800, said Sandeep Matta, founder, TRADEIT Investment Advisor.