- Gold rose 1.25% to $4,661.6, silver gained 0.29% to around $69/oz by 6:19 pm IST
- MCX gold October futures climbed 1.13% to Rs 1,64,155 per 10 grams, silver futures up 0.17%
- US Treasury bond buybacks lowered yields and dollar, boosting precious metals demand
Gold and silver gained on Monday, August 24 as the US Treasury's intervention in the bond market weighed on US dollar.
Spot gold rose 1.25% to $4,661.6 on Monday, while silver advanced 0.29% to around $69/oz by 6:19 pm IST.
Bullion prices in India climbed too, with MCX gold October futures contract surged 1.13% to Rs 1,64,155 per 10 grams, while MCX silver September futures contract jumped 0.17% to Rs 2,47,004 per kg.
According to Kotak, the rally in precious metals is driven by the US Treasury's expansion of long-dated bond buybacks, which pushed yields and the dollar lower while raising concerns over fiscal credibility and possible weakening of the currency. The Bloomberg Dollar Spot Index, a gauge of the dollar, gained 0.1%.
What To Expect Next?
Typically, softer real yields, a weaker dollar, stronger investment demand and fiscal uncertainty remain distinctly bullish for gold. The pace of the advance, however leaves the market vulnerable to profit-taking, while a renewed rise in Treasury yields or the dollar could trigger consolidation. Fundamental outlook remain bullish, with dips likely to attract strategic buying unless macro liquidity conditions reverse, it add.
Technical Levels To Watch
Kotak expects Spot Gold to face resistance at $4,683. If this level is breached, then the metal will find next key resistance at $ 4,707.1. A furtherupside will move the next resistance $ 4,785.1 level, the analysts highlighted. Support is seen at $ 4,605, followed by $ 4,580.9 and $4,502.8.
In case of MCX Gold October futures, resistance levels are placed at Rs 1,64,303, Rs 1,64,931 and Rs 1,66,964. Analysts expect support level at Rs 1,62,271, Rs 1,61,643 and Rs 1,59,610.
In terms of silver, Kotak estimates resistance for Spot Silver at $69.8, followed by $70.4 and further upside of $72.34. Support is seen at $67.86, $67.26 and $65.32.
On MCX, Silver is likely to face resistance at Rs 2,47,834, Rs 2,49,199 and Rs 2,53,618. Support is placed at Rs 2,43,414, Rs 2,42,049 and Rs 2,37,630.
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