Gold price movement woud largely depend on the statement from the US Fed. Here is what experts are making ahead of the US Federal Reserve statement.
Amit Khare, AVP- Research Commodities, Ganganagar Commodities Limited
Gold and silver prices are lower and near their daily lows in midday U.S. trading Tuesday. Featured in both metals today is the weak-handed bulls exiting their long futures positions before Wednesday afternoon's results of the FOMC meeting that began Tuesday morning. August gold futures were last down $10.40 at $1,854.20 and July Comex silver was last down $0.464 at $27.575 an ounce.
The Federal Reserve's FOMC meeting began Tuesday morning and ends Wednesday afternoon with a statement. While no major changes are expected for U.S. monetary policy, focus will be on the Fed's tenor on inflation prospects and when the central bank will start to taper its very easy money policies. Fed officials recently have hinted they will begin discussing a timetable for reducing its bond-buying program (quantitative easing) sooner rather than later. Fed Chair Jerome Powell's press conference after the FOMC statement will be very closely scrutinized. The key outside markets today see the U.S. dollar index jut a bit firmer. The key U.S. Treasury 10-year note yield is fetching 1.49%.
Technically, August gold futures prices were poised to close at a four-week low today. The gold bulls still have the overall near-term technical advantage. However, they are fading as a nine-week-old price uptrend on the daily bar chart has been negated. Bulls' next upside price objective is to produce a close above solid resistance at $1,900.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,810.70. First resistance is seen at today's high of $1,870.90 and then at this week's high of $1,879.70. First support is seen at this week's low of $1,845.70 and then at $1,840.00.
July silver futures bulls still have the overall near-term technical advantage. However, a nine-week-old uptrend on the daily bar chart has been negated. Silver bulls' next upside price objective is closing prices above solid technical resistance at the May high of $28.90 an ounce. The next downside price objective for the bears is closing prices below solid support at $26.00. First resistance is seen at this high of $28.16 and then at last week's high of $28.445. Next support is seen at today's low of $27.485 and then at $27.31.
Gold and Silver showed a negative trend on 15th June. On the Multi-Commodity Exchange (MCX), August gold contracts closed lower by 0.20% at Rs 48,424 for 10 grams. While July contract silver futures closed on Tuesday 0.88% lower at Rs 71,248 a kilogram, Gold and Silver are showing some profit booking on daily as well as weekly technical chart, So traders are advise to create short positions near resistance levels and traders should also focus important technical levels given below for the day:
August Gold closing price Rs 48,424, Support 1 - Rs 48200, Support 2 - Rs 48000, Resistance 1 - Rs 48750, Resistance 2 - Rs 48950
July Silver closing price Rs 71,248, Support 1 - 70700, Support 2 - 70000, Resistance 1 - 71800, Resistance 2 - 72300
Sandeep Matta, Founder, TRADEIT Investment Advisor
Gold saw another selloff ahead of FOMC outcome and nearing its strong support at $1844 an ounce. We expect that the US monetary policy will not see major changes however the tapering discussion likely to weigh on gold. If the Fed remains dovish and continues to preach the 'transitory' stand, this could inject fresh hope in gold to rechallenge the $1,900 psychological level in short run.
Gold throughout the day on MCX has traded in a tight range with negative sentiments and is expected to showcase the same trading behavior ahead of FOMC meeting outcome.
Key level for GOLD AUG Contract - Rs 48501
Buy Zone Above - Rs 48505 for the target of 48650-48850
Sell Zone Below - Rs 48490 for the target of 48300-4810