Gold and silver prices steady on MCX; momentum indicator RSI hints at possible profit booking

Gold prices opened on the Multi Commodity Exchange (MCX) on Tuesday at Rs 59,347 per 10 grams and hit an intraday low of Rs 59,336. In the international market, prices hovered around $1,945.55 per troy ounce. Meanwhile, silver opened at Rs 74,355 per kg and hit an intraday low of Rs 74,157 on the MCX. The price hovered around $24.27 per troy ounce in the international market.

Manav Modi, Analyst, Commodity and Currency, MOFSL, said, “Gold price traded steady as the US market was shut on the back of labour day holiday and also as investors awaited more cues on the health of the US economy ahead of the Federal Reserve’s meeting this month.”

The dollar index and US yields are holding well above 104 and 4.2 per cent mark, respectively, weighing on metals. Bullions have witnessed a strong momentum on higher side over the past few sessions, as a slew of US economic readings showed that the Fed likely has limited headroom to keep raising interest rates.

While nonfarm payrolls rose in August, the unemployment rate and manufacturing PMI supported safe haven assets.

“The US central bank is now almost unanimously expected to keep rates steady in September; however comments from the Governor will be very as the inflation still remains a concern for Fed policymakers. Markets are now awaiting a string of Fed speakers this week for more cues on monetary policy. Focus today will be on Services PMI from major economies, U.S. factory orders and EU PPI Data,” said Modi.

Also read: 60% of NRIs from Australia, Canada, USA, Singapore and Canada consider settling in India post-retirement: Survey

Also read: Deadline for linking Aadhaar to PPF, NSC, or SCSS is approaching. Know the consequences of frozen accounts

Also read: Can I get my health insurance premiums back after paying insurer for more than 10 years?

Yesterday, spot gold closed with a slight loss of nearly $2 at $1938.19 as markets consolidated in thin trading with the U.S. observing the Labour Day holiday.

Amit Khare, Associate Vice President at GCL Broking, said, “October Gold closed at 59393 (-0.01 per cent) and December Silver closed at 74521 (-0.76 per cent). Bullions daily charts are showing some profit booking. Momentum Indicator RSI also indicates the same. Traders are advised to book their long positions and can make fresh short positions in Gold and Silver near the given resistance level one with the stop loss of resistance level two and book near given support levels: Gold October Support 59200/59000 and Resistance 59500/59700. Silver December Support 74000/73500 and Resistance 75000/75600.”

Praveen Singh, Associate V.P., Fundamental Currencies and Commodities, Sharekhan by BNP Paribas, said, “Germany’s trade balance (July) and Euro-zone’s Sentix Investor confidence (September) fell short of expectations. China’s Caixin services PMI data, released this morning, showed that the Index fell to 51.80 in August from 54.10 in July, which may support the U.S. Dollar.”

“Today’s macroeconomic calendar has got final August readings of services PMI and composite PMI of Germany, UK and Euro-zone as the major releases, while the U.S. data include factory orders (July) and durable goods orders (July final). Apart from these important data, investors will also look forward to ECB’s one and three-year inflation expectations. Dip buying is favoured,” says Singh.