Gold price slips after 3 days; silver rates at Rs 69,600

Gold, Silver prices in India on September 2: Gold price fell after three straight sessions of gains in Indian as well as international commodity markets on Wednesday. Prices of gold and silver fell as solid economic data in the US helped lifting the dollar.

On the Multi-Commodity Exchange, Gold October Futures fell by Rs 250 at Rs 51,250, after hitting an intraday low of Rs 51,220 against the previous close of Rs 51,502 per 10 gm. MCX gold futures currently trade almost Rs 4,976 lower than the lifetime high of Rs 56,191 per 10 gm, hit on August 7. On MCX, the yellow metal has risen 41.5% to life-time high since the beginning of the year.

On a similar note, Silver September Futures fell Rs 1,202 at Rs 69,668 per kg today after they touched an intraday low of Rs 69,580 per kg. Silver Futures hit a lifetime high of Rs 77,949 on August 7.

In the international spot market, Spot gold was down 0.3% at $1,964 per ounce, after hitting its highest at $1,991 in the previous session, led by a strong dollar.

The dollar rose from two-year lows as investors were optimistic about better-than-expected data of US manufacturing sector.

While Comex gold fell 0.49% at $1,958 per ounce, US gold futures dropped 0.1% to $1,971. Silver dipped 0.2% to $28.11 per ounce.

Although, a weak momentum in the equity market and rising coronavirus cases helped the commodity cap losses. Worldwide, there were 259 lakh confirmed cases and 8.61 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 66,460 and total coronavirus cases to 37.69 lakh as of Wednesday.

Yesterday, gold and silver rates climbed to their highest level in nearly two weeks as the dollar fell to multi-year lows after US Federal Reserve's announcement of a new monetary policy strategy raised the expectation the central bank would keep interest rates ultra-low.

In India, 24-carat bullion in the national capital traded at Rs 55,010 per 10 gram. Price of 24-carat gold stood at Rs 54,210 per 10 gram in Chennai. In Mumbai and Kolkata, the rate for 24-Carat gold stood at Rs 51,760 and  53,230, respectively.

Technical outlook

Geojit Financial Services in its note said, "Expect corrective selling pressure initially as long as $2000 caps the upside. An unexpected rise above the same is a signal of renewed buying pressure in the counter. For MCX Gold August, resistance is placed at 52,350 and support is at 50,520. For MCX Silver August futures, resistance is at 72,050 and the support is placed at 65,800.

Anuj Gupta, DVP, Commodities and currency, Angel Broking," The US Dollar recovered as US factory activities strengthened in August'20 which might weigh on the gold prices. As of today, traders can go for sell in gold at Rs 51,700 levels with the stop loss of Rs 52,150 levels for the target of 51,000 levels. They can also go for sell in Silver  at Rs 71,000 levels, with the stop loss of 72,500 levels and for the target of 67,000 levels. In the Bullion index 'Bulldex' traders can also go for sell at 16300 with the stop loss of 16550 and for the target of 16000."

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