Gold prices could see support stem from a weakening U.S. dollar, expectations for more global monetary and fiscal stimulus, and escalating tensions between U.S. and China.
India Gold August Futures were trading in a range with a negative bias on July 3 due to the weekend session, but any dips towards Rs 47,700 could be used to go long, suggest experts.
Investors could deploy buy on dip strategy as weak U.S. dollar, expectations for more global monetary and fiscal stimulus and escalating tensions between the U.S. and China is likely to support demand for the yellow metal.
On the Multi-Commodity Exchange (MCX), August gold contracts were trading lower by 0.16 percent at Rs 48,081 per 10 gram at 09:05 hours. July futures for silver were trading 0.16 percent lower at Rs 49,125 per kg.
Gold and silver prices plunged after strong US job data in mid-day sessions but record new virus cases detected in US supports both the precious metals at lower levels.
Despite of 4.8 million new jobs created in the month of June in US gold and silver prices settled with around 0.50 percent gains on Thursday. Gold settled at $1790 per troy ounce and silver settled at $18.32 per troy ounce.
Due to strength in rupee around 1 percent, both the precious metals settled on a weaker note in the domestic market. Gold settled around 48150 with minor loss of 0.25 percent and silver settled around 49200 with a loss of around 0.50 percent.
“Lower than expected US trade balance and jobless claims also supports both the precious metals at lower levels. Gold is having strong support at $1755 per troy ounce/INR 47700 on a closing basis, if prices sustain above $1792/INR 48155 could extend the rally towards $1800-1812 per troy ounce /INR 48330-48500 levels,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart Pvt Ltd told Moneycontrol.
“Market remains volatile due to weekend session and buy on dip strategy will work in both the precious metals. Silver also has strong support at $17.84 per troy ounce /INR 48500 on a closing basis,” he said.
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Expert: Sriram Iyer, Senior Research Analyst at Reliance securities
International gold finished up on Thursday and not too far from $1,800 highs hit earlier in the week supported by safe-haven demand for the precious metal despite upbeat U.S. jobs numbers for June.
Prices could see support stem from a weakening U.S. dollar, expectations for more global monetary and fiscal stimulus, and escalating tensions between U.S. and China.
In the domestic market, strong Rupee could limit gains.
Technically, MCX Gold August contract bounced back from 47600 levels and gave a closed above 48100 with positive sessions. However, volatility will continue to keep prices in a range of 47700-48500 levels.
MCX Silver September contract bounced back from its multiple support levels near 48500 where it gave a close above 49100 levels indicating volatility to continue in a range of 48400-49300 levels.
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