Yellow metal trades flat but above Rs 50,000; buy on dips

Gold was trading a tad lower in Indian markets on December 18, tracking the muted trend in international spot prices. On the Multi-Commodity Exchange (MCX), February gold contracts were trading lower by 0.24 percent at Rs 50,270 per 10 gram at 0920 hours. March silver was trading 0.58 percent lower at Rs 67,873 per kilogram.

Experts say gold is likely to remain volatile and declines can be used as a buying opportunity. The metal has support at Rs 50,050, while resistance is at Rs 50,920.

On December 17, gold and silver extended gains after the US Federal Reserve kept key interest rates unchanged and extended its bond-buying programme to support the economy.

Precious metals also got a boost from the weakness in the dollar index, downbeat US unemployment claims and Philly Fed manufacturing data, stimulus hopes and fear of higher global inflation next year, experts say.

The FOMC meeting that ended December 16 saw the Fed leave interest rates unchanged and this may continue well into 2023.

“We expect both the precious metals to remain firm and any decline in the prices would be a buying opportunity. Gold has support at $1,878-1,866 per troy ounce and resistance at $1,900-1,918 per troy ounce,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.

“At MCX, gold has support at 50,050-49,800 and the resistance is placed at 50,600-50,920 levels. Silver has support at 67,500-67,100 levels and resistance is seen at 6,9200-70,000 levels. We suggest buying on dips in both the precious metals.”

-Published on Dec 18th, 2020