Yellow metal gains in India; could face resistance near Rs 51,900-52,000

India Gold October Futures rose marginally on September 16 despite muted trend seen in the international spot prices. The US Dollar gained ahead of  US Federal Reserve policy decision due later in the day.

Experts expect some volatility in the precious metal ahead of the outcome of the US Federal Reserve policy meeting later today. On the upside, the crucial resistance is placed at Rs 51900-52000 per 10 gm.

On the Multi-Commodity Exchange (MCX), October gold contracts were trading higher by 0.06 percent at Rs 51,800 per 10 gram at 0920 hours. September silver futures were trading flat at Rs 68,930 per kg.

Both the precious metals showed strength in early trading sessions on Tuesday but due to recovery in the dollar index, some profit-taking is seen at higher levels again.

Both the precious metals settled slightly positive in the international markets. Gold closed at $1966.20 per troy ounce Silver settled at $27.46 per troy ounce. At MCX also both the precious metals settled on a flattish note.

The dollar index recovered in the late evening session ahead of the US Federal Reserve meeting outcome later on Wednesday that triggered profit-taking in both the precious metals.

“We expect both the precious metals remain volatile in today’s session ahead of the US Federal Reserve meeting outcome and expected to hold key support levels. Gold is having support at $1955-1940 per troy ounce and resistance at $1978-1988 per troy ounce,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.

“At MCX, gold is having support at 51550-51300 and resistance at 51920-52050. Silver is having support at $27.00-26.70 per troy ounce and resistance at $27.80-28.00 per troy ounce,” he said.

Jain further added that at MCX, silver has support at 68500-68000 levels and resistance near 69500-69900 levels. We suggest buying a dip in both the precious metals in Wednesday’s session.

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Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities

International spot gold and silver prices gave up gains on Tuesday and ended flat as the U.S. Dollar rebounded from the lows of the session ahead of the Fed outcome.

However, hopes for a dovish monetary policy stance from the U.S. Federal Reserve capped losses. International gold and silver were flat this Wednesday morning in Asian trade ahead of the Fed meeting conclusion tonight.

Domestic bullion could start trade flat on Wednesday morning, tracking a weak start in the overseas prices. Technically, MCX Gold October is trading above the 21-Daily Moving Average which is placed at 51600 levels.

However, it has retreated from 52100 levels of its previous peak. Upside resistance is at 51900-52200 levels. Support holds at 51400-51150 levels.

MCX Silver December contract has closed below 69000 levels where some downside pressure will continue if it sustains 69000 levels in coming sessions. However, below 68500 level, it will continue the sideways to marginal downside momentum up to 67300-66000.

Hareesh V, Head of Commodity research, Geojit

Optimism of economic recovery continues to hit the safe-haven demand and thus the price of gold. Meanwhile, hopes of fiscal stimulus measures and a weak dollar will continue to offer lower-level support to the metal.

However, investors may take cautious bets today ahead of the US Fed policy decision and the news conference from Chairman Jerome Powell later the day.

Technical Outlook (London spot): A range-bound trading inside $1880-1975 an ounce is expected initially and breaking any of the sides would suggest a fresh direction to the commodity.

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