Yellow metal trade higher; could face resistance around Rs 51,000

India Gold MCX December Futures started higher on Friday after falling over 1 percent in the previous trading session. Experts are of the view that investors can accumulate the yellow metal on dips for a target of Rs 50920-51100 levels.

On the Multi-Commodity Exchange (MCX), December gold contracts were trading higher by 0.15 percent at Rs 50,844 per 10 gram at 0920 hours. December silver futures were trading 0.04 percent lower at Rs 62,587 per kg.

Gold and silver plunged on Thursday amid a rebound in the dollar index and fading US stimulus talks. Gold and silver settled on a weaker note in the international markets.

Gold settled at $1904.60 with a loss of over 1 percent while Silver also settled at $24.71 per troy ounce with a loss of more than 2 percent. Domestic markets were also settled on a weaker note.

Gold's 3-days rally halted on Thursday as the dollar recovered from its seven-week low and talks continued to drag on between the White House and rival Democrat lawmakers for a COVID-19 financial relief plan before the U.S. election, suggest experts.

“Hopes for a stimulus deal faded on Thursday as negotiators said distance remained between the White House and the Democratic-led Congress for an agreement, although talks were continuing. Gold and silver also plunged after upbeat US unemployment claims and existing home sales data released on Thursday,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.

“We expect both the precious metals remain volatile due to volatility in the dollar index and speculation over the US stimulus but lower-level support is expected in both the precious metals. Friday's EU and US manufacturing data will also give directions to both the precious metals,” he said.

Jain further added that Gold has support at Rs 50550-50300 and resistance is seen at Rs 50920-51100 levels. Silver also has support at Rs 62000-61600 and resistance at Rs 63200-64000 levels. “We suggest buying on a dip in gold around Rs 50500 and in silver around Rs 61800 levels,” he added.

-Published on October 23rd, 2020