Gold - July 28, 2020 - Mr. Tapan Patel - Senior Analyst (Commodities), HDFC securities

Gold prices pared early gains with COMEX spot gold prices fell to $1923 after hitting record highs at $1981. Gold prices at MCX for August contract were trading down to Rs. 51743 with correction in global gold prices.

Gold prices witnessed selling on Tuesday with a recovery in dollar index after the US prepared to unveil a new aid package of $1 trillion. If passed, the bill will slash by two-thirds supplemental unemployment benefits of $600 a week that expire at the end of the month. The package would include payments of $1,200 as well as loan packages for businesses. Gold prices also traded under pressure after China's gold consumption fell to 323.29 tonnes, by 38% year-on-year in the first half of 2020.

We expect gold prices to resume uptrend after today's correction with resistance at $1980 and support at $1900. MCX Gold August has important resistance at Rs. 52400 support at Rs. 51400.