Gold price in India saw a huge drop on Wednesday, November 3, a day ahead of Diwali. The yellow metal price has been hovering in Rs 47,000-zone for the last few weeks. On the Multi-Commodity Exchange (MCX), December gold price fell 0.23 per cent to Rs 47,514 for 10 grams at 0915 hours on November 3. Silver price was also in the red zone on Wednesday. Silver price dropped 0.03 per cent to Rs 63,207 on November 3.
In the international market, gold prices edged lower on Wednesday. All eyes were on the results of the US Federal Reserve policy meeting scheduled on November 3. Spot gold fell 0.2 per cent to $1,784.04 per ounce by 0138 GMT while US gold futures dropped 0.2 per cent to $1,785.30, according to Reuters. The Fed is expected to announce its stimulus tapering timeline on November 3, the analysts believed.
“International gold prices have started weaker this Wednesday morning in Asian trade as investors turned cautious ahead of the Fed meeting outcome tonight. Technically, if COMEX Gold December trades below $1791.53 levels, it could witness a downside momentum up to the support zones at $1774.87-$1770.73 levels. Resistance zones is at $1806.07-$1812.33 levels. Domestic gold prices could start with cuts this Wednesday morning, tracking weak overseas prices. Technically, if MCX Gold December trades below Rs 47,700 it could test the support zones at Rs 47,516-47,409 levels. Resistance zones is Rs 47,807-47,991 levels,” said Sriram Iyer, senior research analyst at Reliance Securities.
Indians usually buy gold and silver during the auspicious occasion of Diwali. Gold has been an integral part of the portfolio and investors should see it as a hedge against inflation and other economic uncertainty. With gold prices remaining below Rs 48,000-mark, investors suggested buying gold around this time. Investors should buy gold within the range of Rs 47,500-48,000, said NS Ramaswamy, head of commodities, Ventura Securities. The yellow metal prices were expected to hit Rs 52,000 by the end of this year. “Once the interest rates start to rise, there would be a greater appeal to the dollar currency. Thus, the yellow metal would remain in the range of Rs 50,000-52,000,” the analyst suggested.
“Comex gold price declined 0.30 per cent on the back of stronger dollar index and ahead of a crucial US Federal Reserve meeting that is likely to offer cues on future interest rate hikes amid rising inflationary pressures. US benchmark 10 -year treasury yields reduced by 2.54 per cent to 1.53, reducing the opportunity cost of holding non-yielding bullion,” said ICICI Securities in a note.
“Gold was almost 6 per cent cheaper than it was during Dhanteras last year, which has encouraged people to buy the precious metal this festival. Gold imports zoomed to about $24 billion in the April-September period, according to commerce ministry data, nearly four times the $6.8 billion of imports in the corresponding period last year. There has been seen a significant rise in customer footfalls across jewellery stores and almost 30% rise in sales volumes than previous year. We expect gold prices in MCX to remain range bound till the Fed meeting. Buy Zone Above – Rs 47,600 for the target of Rs 47,900
Sell Zone Below – Rs 47,300 for the target of 47,000,” said Ravi Singh, vice president & head of Research, ShareIndia.
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