Domestic gold and silver prices were little changed on Monday amid weakness in global benchmarks as the dollar strengthened against a basket of currencies. A stronger dollar makes the yellow metal more expensive for those holding other currencies. A surge in equities on Dalal Street boosted investors' appetite for risk, denting the allure of precious metals as a safety bet.

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At 10:02 am, the December gold futures contract on MCX traded Rs 26 or 0.1 percent higher at Rs 46,532 per 10 grams. Silver December futures were up Rs 81 or 0.1 percent at Rs 60,631 per kilogram. On Friday, the two contracts had settled at Rs 46,506 per 10 grams and Rs 60,550 per kilogram respectively.

Globally, gold prices edged down as investors awaited a key US jobs report later this week that could influence the Federal Reserve’s timeline for tapering its asset purchases.

Spot gold was flat at $1,761 per ounce in early Asian trade, having slid to as low as $1,757.9 per ounce earlier in the day. US futures were up 0.2 percent at $1,761.6 per ounce.

Silver was flat at $22.6 per ounce, after dipping to as low as $22.5 per ounce earlier on Monday.

The rupee weakened by five paise to 74.17 against the dollar amid weakness across its Asian peers.

The dollar index - which gauges the greenback against six peers - rose

0.1 percent to 94.1 in early Asian trade, rebounding from its lowest level since September 29.

Data on the non-farm payrolls in the US will be released on Friday. A poll of economists by news agency Reuters, the upcoming data is expected to show an addition of 4,60,000 jobs in September.

Analysts will track the numbers for signs of recovery in the world's largest economy which may influence the US central bank's decision on early tapering or easing of its ultra-loose monitory policy.

Domestic equity benchmarks Sensex and Nifty50 surged more than one percent each in a rebound from losses in the past four sessions and shrugging off weakness across other Asian markets amid concerns over the future of the financially-troubled Chinese property developer Evergrande. The group has missed two deadlines in the past two weeks to pay interest on bonds.

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"Precious metal seems to consolidate around the $1,750/ounce level amidst a looming energy crisis. In the past few days, price action in gold was promising while renewed stagflation fears led to positivity in short-term momentum indicators," said Sandeep Matta, Founder of TRADEIT Investment Advisor.

US dollar and treasury yields are showing reversal from the top and increasing energy prices may help precious metals regain their status, he said.

Gold is often considered a hedge against higher inflation, but a Fed rate hike would increase the opportunity cost of holding gold, which pays no interest.

Manoj Kumar Jain, Director, Head - Commodity and Currency Research at Prithvi Finmart, suggests a buy-on-dips strategy in both precious metals this week.

According to Jain, MCX gold futures have support at Rs 46,300-46,100 and resistance at Rs 46,720-46,900, and pegs support for the white metal at Rs 60,000-59,500 and resistance at Rs 61,100-61,700.

He recommends buying gold on dips to around Rs 46,300 for a target of Rs 46,800 with a stop loss at Rs 46,050. Silver can be bought around Rs 60,000 for a target of Rs 61,700 with a stop loss at Rs 59,220, he said.

MCX gold is near the crucial level of Rs 46,500, according to Matta, who expects high volatility in the market going forward. He sees a buy zone above Rs 46,500 for a target of Rs 46,700-47,000, and a sell zone below Rs 46,475 for a target of Rs 46,300-45,125.

(Edited by : Sandeep Singh)

First Published:Oct 4, 2021 11:31 AM IST