Gold prices in India traded flat on the Multi Commodity Exchange (MCX) Wednesday tracking a muted trend in the international spot prices. The prices of bullion rallied sharply in the previous session amid weak US inflation data.

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At 11:20 am, gold futures for October delivery eased 0.07 percent to Rs 47,229 per 10 grams as against the previous close of Rs 47,260 and the opening price of Rs 47,185 on the MCX. Silver futures traded 0.41 percent lower at Rs 63,323 per kg. The prices opened at Rs 63,398 as compared to the previous close of Rs 63,585 per kg.

“The gold prices have seen a rally after the US dollar and bond yields dipped. The Federal Reserve meeting outcome will now be in focus for further cues on tapering. On MCX, the trend in gold prices remains positive above Rs 47,100 level. Festive demand and growth concerns will support the precious metal prices going ahead,” said Ajay Kedia, Director, Kedia Advisory.

International gold prices rallied on lower than expected US inflation data. The US consumer price index (CPI) increased 0.3 percent in August compared to July.

“Gold pops above $1,800/oz after the release of consumer Price Index which clearly indicates that the inflationary pressures are still looming in the economy and maybe it’s the right time to sit either on cash or invest in the safe haven,” said Sandeep Matta, Founder, TRADEIT Investment Advisor.

The technical setup for the gold is bullish while current resistance resides first at $1,809 and secondly at $1,815.70 which is gold’s 100-day moving average. Gold on MCX has also reentered into bullish setup after yesterday’s move however outlook is stable and rangebound today, he added.

According to Matta, the key level for gold is Rs 47,067. He recommends buying gold above Rs 47,100 for the target of Rs 47,513-47,767; while sell gold below Rs 47,050 for the target of Rs 46,813-46,690.

Meanwhile, a firm Indian rupee amid strength in the domestic equity market pressurized the precious metal prices.

Manoj Kumar Jain, Prithvi Finmart expects both precious metals to remain volatile in today’s session and could hold their support levels.

“Gold is having support at $1,796-1,784 per troy ounce and resistance at $1,818-1,832 per troy ounce; silver is having support at $23.55-23.20 per troy ounce and resistance at $24.14-24.50 per troy ounce.

At MCX, gold is having support at Rs 47,050-46,920 and resistance at Rs 47,400-47,550; silver is having support at Rs 63,100-62,800 and resistance at Rs 63,900-64,200 levels,” Jain said.

He suggests buying silver on dips around Rs 63,200 with a closing stop loss of Rs 62,800 for the target of Rs 64,100.

Amit Khare, AVP- Research Commodities, Ganganagar Commodities advises investors to buy gold and silver on dips in prices.

“We saw a good short-covering rally in bullions from bottom levels on Tuesday, this may continue for the next few trading sessions. Technical charts are showing some strength in gold and silver. Momentum indicator RSI also indicating the same. So traders are advised to create fresh buy positions in gold and silver in small dips near given support levels,” said Khare said.

October Gold: Support 1 – Rs 47,000, Support 2 – Rs 46,800; Resistance 1 – Rs 47,450, Resistance 2 – Rs 47,700.

December Silver: Support 1 – Rs 63,000, Support 2 – Rs 62,400; Resistance 1 – Rs 64,200, Resistance 2 – Rs 65,030.