Gold prices in India traded higher on the Multi Commodity Exchange (MCX) Wednesday tracking a positive trend in international spot prices amid a fall in US Treasury yields, analysts said.
At 11:50 am, gold futures for August delivery rose 0.29 percent to Rs 47,823 per 10 grams as against the previous close of Rs 47,684 and the opening price of Rs 47,761 on the MCX. Silver futures traded 0.67 percent higher at Rs 69,978 per kg. The prices opened at Rs 69,620 as compared to the previous close of Rs 69,512 per kg.
A drop in US Treasury yields and softer dollar ahead of US Federal Reserve minutes are supporting the precious metal prices. Covid concerns are also lifting the safe-haven appeal for gold, said Ajay Kedia, Director, Kedia Advisory.
According to Kedia, the bias for gold remains positive and hence advises investors to buy gold on a drop in prices.
On MCX, gold may face resistance at Rs 48,200 and support is seen at Rs 47,380. Silver may find resistance at Rs 71,600 and support at Rs 68,700, Kedia said.
International gold prices held firm near the key $1,800/ounce psychological level on Wednesday, helped by a drop in US Treasury yields, while investors awaited minutes from the Federal Reserves June meeting for more clues on its policy outlook, said a Reuters report.
Spot gold was up 0.1 percent at $1,797.84 per ounce, after hitting its highest since June 17 at $1,814.78 on Tuesday. US gold futures rose 0.3 percent to $1,799 per ounce.
Benchmark 10-year Treasury yields were pinned near their lowest in more than four months. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.
Market participants are now awaiting minutes from the Feds latest meeting, due at 1800 GMT, which could shed more light on the interest rate trajectory after a hawkish tilt by the US central bank last month.
Precious metal seems to be in the process of switching its direction as after three weeks of sideways consolidation it crossed $1,800 level yesterday though could not close above it. US bond yields held near a two-week low while investors are watching for the Federal Reserves minutes to gauge the outlook for US interest rates, said Sandeep Matta, Founder, TRADEIT Investment Advisor.
On MCX, it seems that gold prices have entered in the accumulation zone and any dip should be a buying opportunity until it breaches and close below Rs 46,500 level, Matta added.
Meanwhile, depreciation in the Indian rupee against the US dollar amid volatility in the domestic equity market lifted appeal for the safe-haven bullion.
The overall structure of bullion is strong. Now momentum indicator RSI is also cool down in the hourly chart and again ready for upside movement. So traders are advised to create a long position in gold and silver. Traders should also focus on important technical levels for the day, said Amit Khare, AVP- Research Commodities, Ganganagar Commodities.
August Gold: Support 1 Rs 47,300, Support 2 Rs 47,000; Resistance 1 Rs 48,100, Resistance 2 Rs 48,500.
September Silver: Support 1 Rs 68,500, Support 2 Rs 68,100; Resistance 1 Rs 70,500, Resistance 2 Rs 71,400.