Domestic gold and silver prices started the week on a mixed note with the yellow metal inching lower on Monday, as the dollar bounced back from a one-month low. Strength in the greenback makes precious metals less attractive for holders of other currencies. A record-breaking spree on Dalal Street continued to hurt the safe-haven appeal of gold.

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At 9:04 am, Multi Commodity Exchange (MCX) gold futures for October delivery traded with a loss of Rs 82 or 0.2 percent at Rs 47,442 per 10 grams, compared with its previous close of Rs 47,524 per 10 grams.

Silver December futures were up by Rs 51 or 0.1 percent at Rs 65,260 per kilogram. On Friday, the white metal contract had settled at Rs 65,209

per kg.

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Globally, gold prices hovered below a two-and-a-half-month peak after a disappointing US jobs data signalled that the Federal Reserve could push back the timeline for tapering stimulus measures, bolstering bullion's appeal as an inflation hedge.

The benchmark spot gold rate was steady at $1,826.65 per ounce, having its a peak since June 16 in the previous session at $1,833.80. US futures were down 0.3 percent at $1,828.60.

The dollar index -- which gauges strength in the greenback against six other currencies -- was up 0.2 percent at 92.20, rebounding from a one-month trough hit in the previous session.

Meanwhile, the recent strength in the rupee amid continuous buying in the domestic equity market is pressurising the precious metal prices.

The US Labor Department data showed on Friday that US nonfarm payrolls increased by 2,35,000 jobs last month, missing economists' estimates of 7,28,000, as hiring in the leisure and hospitality sector stalled.

Fed Chair Jerome Powell had hinted last month that reaching full employment was a prerequisite for the US central bank to start paring back its asset purchases.

After disappointing payrolls data, the US central bank could continue with its soft monetary policy for a longer period, according to Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart. "Continuation of soft monetary policy in the US, weakness in the dollar and geopolitical tensions could support precious metal prices going forward," he said.

He expects the benchmark to test the $1,850 per ounce mark in the upcoming session. He sees support to come in at Rs 47,330-47,155 levels for MCX gold, and resistance at Rs 47,770-47,920. For silver, he has pegged support at Rs 64,600-64,100 and resistance at Rs 65,800-66,200.

"The tepid job data count clearly indicates that the economic growth on consumer demand has taken few steps backward and the impact of the Delta variant of Covid-19 on global economies," said Sandeep Matta, Founder of TRADEIT Investment Advisor.

"Bulls have a technical medium-term advantage over bears on account of subdued economic growth, currency weakening and the dovish Fed commentary. The overall outlook and setup are positive for September 6 and market participants are advised to follow below key pivotal levels," he added.

Time to take positions?

Jain recommends buying gold futures around Rs 47,330 for a target of Rs 47,770 with a stop loss at Rs 47,150.

Matta sees Rs 47,386 as a key level for the August gold contract. He suggests a buy zone above Rs 47,375 for a target of Rs 47,737-47,950 levels, and a sell zone below Rs 47,375 for a target of Rs 47,200-47,040.

First Published:Sept 6, 2021 9:27 AM IST