Gold prices in domestic commodity markets rallied on Thursday, tracking bullish cues from international market as Federal Reserve kept interest rates unchanged.
On MCX, gold futures for the August month traded 1.12% or Rs 524 higher at 47,150 per 10 gm, after hitting the day's high at 47,234 against the earlier close of 46,626. The metal hit an intraday low of 46,750, also its opening price today.
Overseas, gold price traded near one-week high today as gloomy economic projections from the Fed sent the US dollar and most Wall Street shares lower, boosting demand for the yellow metal.
Spot gold was trading 0.95% higher at $1,729.20 per ounce. The safe-haven metal rose 1.3%- its largest daily percentage rise in over a month on Wednesday. US gold futures too climbed 1.2% to $1,741.90.
The Federal Reserve after its two-day meet estimated the US economy to shrink by 6.5% in 2020 and the unemployment rate to be at 9.3% at year's end. Further, it pledged its full support to ease the pandemic pain.
Fed officials after its meet on Wednesday also flagged the need to keep the key interest rate near zero through at least 2022.
Selling pressure in US dollar, large stimulus measures and low-interest rates tend to support the demand for the precious commodity.
Commenting on domestic gold's near-term technical indicators, Anuj Gupta (DVP-Commodities & Currencies Research, Angel Broking) said, "For intraday perspective, traders can buy gold at 47000 levels, with the stop-loss of 46750, for the target of 47600 levels. Weakness in the dollar and low bond yields may also support the gold prices. In the international market, gold may test $1750 levels soon."
Geojit Financial in its daily report expects the trend for the precious metal to remain on the positive side till prices stay above $1660 and added that it requires to break $1735 to continue the momentum for the day. Conversely, a direct drop below $1660 would trigger selling pressure which may take prices towards $1620 or more, the report added later. As per Geojit Financial, MCX Gold August future's Resistance is at Rs 46780, while support is at Rs 45870.