Gold price in India fell to a record five-month low on Monday, following the trend in the international market. On the Multi-Commodity Exchange (MCX), October gold contracts tanked 1.33 per cent to Rs 46,019 for 10 grams at 0950 hours on August 9. Silver also saw a huge drop on Monday. The precious metal future slumped 2.03 per cent to Rs 63,681 on Monday.
The yellow metal dropped to a more than four-month low in the international market on Monday. The analysts feared Federal Reserve would raises rates quicker than expected as the US jobs data had improved in July. US employers hired the most workers in nearly a year in July and continued to raise wage. Spot gold fell 2.3% to $1,722.06 per ounce by 0048 GMT. Earlier in the session, prices touched $1,684.37, their lowest since March 31. US gold futures slipped 2.1% to $1,726.40, Reuters reported. Silver slumped as much as 7.5% hitting a more than eight-month low of $22.50 per ounce earlier in the session.
“The US nonfarm payrolls (NFP) report exceeded expectations with a 943,000 addition in jobs last month. So, the market is anticipating that the Fed’s taper date could be brought forward with an announcement as early as the September meeting and the actual tapering could begin as early as January 2022. The dollar and benchmark 10-year Treasury yields jumped after the data, denting non-yielding gold’s appeal,” said Sriram Iyer, senior research Analyst at Reliance Securities.
“International spot and futures gold & silver prices have started this Monday morning in Asian trade with big cuts extending weakness from last week as better expected U.S. jobs data, could bring forth the timing of the Federal Reserve policy tightening. Technically, LBMA Gold has corrected more than 1.5% where it has breached the support of $1750 levels indicating a downside pressure to continue up to $1722-$1710 levels. Resistance is at $1746-1758 levels. Technically, if LBMA Silver trades below $24.00 levels we could witness the continuation of its Bearish momentum up to $23.53-$22.55 levels. Resistance is at $24.15-$25.19 levels,” Iyer added.
“Domestic gold and silver prices and Bullion Index futures will start with a gap down trade this Monday morning, tracking overseas prices. On the domestic front, if MCX Gold October starts below 46650 we could witness that the futures could continue its correction up to Rs 46,380-46,100 levels. Resistance is at Rs 46,800-47,000 levels. On the domestic front, MCX Silver September is sustaining below Rs 65,000 below which could see Rs 64,090-63,200 levels. Resistance is at Rs 65,500-66,250 levels,” he further mentioned.
“Gold prices tumbles on Friday after stronger than expected employment data in US while US gold futures are trading with highly negative sentiments and made low of $1677/oz in opening tick today however recovered to some extent. The outlook is bearish for safe heaven as it faces strong fundamental headwinds including rising dollar and bond yield,” said Sandeep Matta, founder, TRADEIT Investment Advisor
“Gold on MCX has also broken Rs 47,000 level and in the tight grip of bears. The market sentiments are highly negative for the precious metal however we are nearing the lower trading range of gold where longer term investors will find the suitable risk reward. Gold is expected to open negative on MCX where today’s low will be critical for gold to sustain. Key level for gold August contract – Rs 46,923. Buy Zone Above – Rs 46,950 for the target of Rs 47,291-47,500. Sell Zone Below – Rs 46,923 for the target of Rs 46,273-45,905,” Matta further added.
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