October 21, 2020

Gold price today: Yellow metal trades weak; support seen at Rs 48,800

Gold price today: Yellow metal trades weak; support seen at Rs 48,800

By Administrator_ India

Capital Sands

India Gold October Futures fell on September 28 following a muted trend seen in the international spot prices. Experts feel that the weakness is likely to continue for the precious metals, but Gold may find support near Rs 48,800-48,500 levels while resistance is seen near Rs 50,000 levels.

On the Multi-Commodity Exchange (MCX), October gold contracts were trading lower by 0.20 percent at Rs 49,560 per 10 gram at 0920 hours. December silver futures were trading 1 percent lower at Rs 59,027 per kg.

Gold and silver prices crashed last week amid gains in the US Dollar index and uncertainty on further stimulus support from the US Federal Reserve.

Gold prices plunged 4.78 percent at Comex division and settled at $1,864.15 per troy ounce while Silver also crashed and slipped 14.84 percent to settle at $22.97 per troy ounce at Comex division.

India Gold settled at Rs 49,659 per 10 gram with a weekly loss of nearly 4 percent and Silver settled at Rs 59,027 per one kilogram with a weekly loss of over 13 percent.

Strength in the Dollar index and uncertainty over further stimulus support from the US Federal Reserves triggered heavy sell-off in both the precious metals, suggest experts. The dollar index reached a two-months high and gained 1.74 percent last week and settled at 94.62 marks.

“Rising coronavirus cases across the world and fear of a second phase of lockdown in Europe also support the dollar and push other global currencies lower. On the other hand, US unemployment is still at 8,70,000 levels but housing sales have improved a lot and reached 14 years high due to lower interest rates,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Money control.

“We expect both the precious metals remain volatile this week and further strength in the dollar index could push prices lower. Gold is having strong resistance at $1,884-1900 per troy ounce and further selling is expected at higher levels. Gold could test its support levels of $1844-1818 per troy ounce levels again,” he said.

Jain is of the view that Gold is likely to face strong resistance at Rs 50,050-50,300 levels and selling is expected at higher levels again. Gold could test its support levels of 48,800-48,500 levels.