Gold prices today drop after big jump, silver rates drop

Spot gold eased 0.2% to $1,801.78 per ounce after strong gains in the previous session while silver fell 0.5% to $23.54 per ounce.  The dollar index inched higher to 93.043 after falling about 0.6% on Monday. 

“Gold markets rallied significantly during the trading session as it broke above the 50 day EMA, to reach towards the 200 day EMA. The 200 day EMA sits at the $1804 level. Moving forward people will be paying attention to the statement coming out of there as to whether or not the Federal Reserve is likely to start tapering. the downside, if it breaks down below the lows of last week, then there is a possibility of a move down to the $1750 level. On the upside, it is close above the $1830 level that will trigger a “buy-and-hold" situation," say analysts at CapialVia Investment Advisor.

In MCX, the support for gold can be seen at 46850-47000 level and resistance at 47700-47900, the analysts said. 

Data from IHS Markit showed U.S. business activity growth slowed for a third straight month in August as capacity constraints, supply shortages and the rapidly spreading Delta variant weakened the momentum of the rebound from last year's pandemic-induced recession.

Gold traders will now be watching  comments from Fed Chair Jerome Powell at the annual Jackson Hole, Wyoming, symposium awaiting guidance on the U.S. central bank's taper plans.

Traders are also monitoring President Joe Biden’s $4.1 trillion economic agenda, with key votes due in the House of Representatives.

ETFs continued to suffer outflows. SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.5% to 1,006.66 tonnes on Monday from 1,011.61 tonnes on Friday. (With Agency Inputs)