Gold Price Today: Yellow metal in oversold zone after Fed signals easing in bond purchases

#Commodities

Gold prices dipped on September 23 after the US Federal Reserve signalled easing its monthly bond purchases by next year and a sooner-than-expected interest rate hike, which could increase the opportunity cost of holding the non-yielding bullion.

On the Multi-Commodity Exchange (MCX), October gold contracts were trading lower by 0.62 percent at Rs 46,383 for 10 grams at 0916 hours. September silver futures were lower by 0.97 percent at Rs 60,585 a kilogram.

On September 22, gold rose by Rs 196 to Rs 45,746 per 10 gram amid firm global cues and rupee depreciation. Silver jumped Rs 319 to Rs 59,608 per kg from Rs 59,289 per kg in the previous trade.

“Gold and silver extended their gains on Wednesday ahead of the Federal Reserve meeting outcomes. Both the precious metals were settled on a positive note in the international markets,” said Manoj Kumar Jain, Director, Head-Commodity & Currency Research, Prithvifinmart Commodity Research.

Gold prices could test its support level of $1750 again with support at $1762-1750 per troy ounce and resistance at $1792-1800 per troy ounce while silver has support at $22.66-22.20 per troy ounce and resistance at $23.20-23.55 per troy ounce. At MCX, gold has support at 46440-46180 and resistance at 46800-47100 levels while silver has support at 60500-59900 and resistance at 61600-62100 levels.

We suggest selling gold below 46700 with a stop loss of 46920 for the target of 46300 and silver below 61000 with a stop loss of 61600 for the target of 60000.

Trading Strategy

Abhishek Chauhan, Head of Commodity & Currency

Gold prices slipped from higher levels after the Fed signaled to taper the bond-buying and to raise interest rates by late 2022. Gold prices sustained above the immediate hurdle of 46400 where a break out is expected having resistance at 46800 above this level it may move towards 47300-47500 levels while support is seen at 46400-46200 levels. Silver is likely to test the 62700 levels. It has immediate support at 60400.

Ravi Singh, Founder and Director, DRS Advisory

Gold on MCX closed on a positive note as fears of a spillover from China Evergrande’s debt woes drove demand for safe-havens. Whether China’s Evergrande will be able to meet its obligations is a key test today, when interest payments on its two notes are due. In addition, investors will be looking for clues as to how eager Xi Jinping’s government is to step in and assist China’s second-largest property developer in order to prevent financial contagion from destabilizing its economy.

Buy zone above – 46700 for the target of 47500

Sell zone below – 46400 for the target of 45800

Sandeep Matta, Founder, TRADEIT Investment Advisor

The gold prices reversed its entire earlier gains after Fed chairman mentioned gradual start of tapering its $120 billion monthly asset purchase. The exact timeline is still not announced however acknowledging the economic recovery and vaccination drive fed has been laying out the carpet for a tapering announcement in coming months. The outlook for gold is negative and becoming a purely skilled traders’ play with pivotal price points.

Key level for gold – 46663
Buy zone above – 46690 for the target of 46798-46914

Sell zone below – 46650 for the target of 46400-46135

Amit khare, AVP- Research Commodities, Ganganagar Commodities

Fed Chairman Jerome Powell’s upbeat remarks on the U.S. economy and jobs-growth prospects dented the gold bulls’ enthusiasm as the U.S. dollar index rallied to its daily high while Powell was giving his press conference. October gold futures were last down $6.60 at $1,769.50. December Comex silver was last up $0.054 at $22.665 an ounce.

Gold and Silver are going to open gap down as per comex chart, This will be again a good opportunity for buyers, because the technical chart of both metals are trading at oversold zone, Momentum indicator RSI also indicating the same and creating a strong positive divergence in 4 hourly as well as daily chart, So traders are advised to create fresh buy positions in gold and silver in gap down opening, traders should focus important technical levels

October gold closing price 46672, Support 1 – 46500, Support 2 – 46250, Resistance 1 – 46800, Resistance 2 – 47000.

December silver closing price 61180, Support 1 – 60700, Support 2 – 60000, Resistance 1 – 61630, Resistance 2 – 62260.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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