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Gold price trades above Rs 50K mark, silver rates at Rs 60,700

BusinessToday.In     October 14, 2020

Gold, Silver prices in India on October 14: Gold price in India reversed from earlier losses and gained marginally to trade above Rs 50K mark on Wednesday, in line with global markets.

Gold October Futures on the Multi Commodity Exchange traded Rs 90 higher at Rs 50,335 after hitting an intraday high and low of Rs 50,395 and Rs 50,270, respectively.

Silver September Futures traded at Rs 60,790 per kg today, rising Rs 250 over the last close of Rs 60,540 per kg.

Overseas, gold price steadied from bearish momentum today and traded below the key $1,900/ounce psychological level as the dollar stayed firm amid faded hopes of coronavirus relief package in the US.

Gold price falls after 3 days; silver rates at Rs 62,500

Comex gold 0.2% higher at $1,89130 today, while US gold futures were unchanged at $1,898.30. Spot gold was steady at $1,895.04 per ounce, after declining 1.6% in the earlier session. Silver fell 0.1% to $24.14 per ounce.

The strong rise in the dollar was on the back of renewed questions over a COVID-19 vaccine. Worldwide, there were 383 lakh confirmed cases and 10.9 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 72-lakh mark and the death toll from COVID-19 infections rose to 11.0 lakh, as of today.

Gold has gained 25% so far this year as major central bankers have called for renewed government spending to recover major economies from the coronavirus pandemic-induced recession.

Uncertainty around US elections and the possibility of additional stimulus drove investors to the bullion, which is considered as a hedge against inflation and currency debasement.

On the retail front, physical 24-carat bullion per 10 gram in the national capital traded at Rs 54,090. Price of 24-carat gold stood at Rs 53,100 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold fell back to Rs 50,550 and 53,160, respectively.

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As per Geojit Financial Services, support of $1870 if cleared expect selling pressure to continue for the day. Else, there are chances of recovery upticks. However, a direct rise above $1975 is needed to trigger rallies. For MCX Gold August, resistance is placed at 51280 and support is at 49900.

Commenting on Silver's near-term technical indicators, the brokerage said," Spot Silver Inability to move past $25.20 intraday bias largely on the downside. However stiff support of $23 is required to break to continue the ongoing selling momentum. For MCX Silver August futures, the resistance is at 62820 and the support is placed at 58200.

Commenting on gold's outlook, Hareesh V, Head of Commodity research Geojit Financial said,"Hopes of an immediate US economic stimulus package and a recovery in dollar continue to dent gold prices.  However, rising pandemic worries and unsolved US-China trade tensions may boost the safe-haven demand and thus the price of the commodity."

Anuj Gupta - DVP- Commodities and Currencies Research, Angel Broking said, "On Tuesday, Spot Gold dipped 1.70 percent to close at $1,889 per ounce and Spot silver ended lower by 3.88 percent to close at $24.12 per ounce as strengthening of the U.S. currency weighed on the Dollar-denominated Gold. On MCX Gold corrected by 1.69% and closed at 50245 levels. Silver also corrected by 4.05% and closed at 60,542 levels."

He added, "Uncertainty over the new coronavirus bill led to the rally in the U.S. Dollar. The democrats voiced their concerns over President Donald Trump latest offer on the coronavirus relief fund; however, U.S. House Speaker Nancy Pelos continued to hope for a possible deal. The yellow metal prices were further pressurized as China's economy continued to expand in September 20 reflecting the improvement in overseas demand and a balanced recovery boosted the risk appetite amongst investors. Moreover, the International Monetary Fund expressing worries over the outlook for many emerging markets as the virus continued to spread limited the losses for the safe haven, Gold. Uncertainty over additional corona relief fund by the U.S. amid appreciating Dollar might weigh on Gold."

On gold's technicals, he said," As for today traders can go for sell in gold at Rs 50,600 levels with the stop loss of Rs 51100 levels for the target of 49500 levels. They can also go for sell  in Silver at Rs 61,200 levels, with the stop loss of 61,700 levels and for the target of 59,800 levels."

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