(Time Zone: Arizona, USA)
International spot and comex futures gold and silver rebounded on Tuesday, tracking the weakness of the U.S. Dollar and talks of stimulus.
The dollar fell on Tuesday to its lowest level in more than 2-1/2 years, as investors' appetite for risk increased on prospects of further fiscal stimulus from the United States as well as expectations of a solid global recovery.
Top Senate Republican Mitch McConnell said on Tuesday the U.S. Congress should include a fresh wave of coronavirus stimulus in a $1.4 trillion spending bill, with top U.S. economic officials also pressing Congress for more aid to small businesses.
The emergency lending programs the Federal Reserve set up during the pandemic could be revived quickly after they expire at year-end, a senior New York Federal Reserve official said.
Federal Reserve Chair Jerome Powell highlighted challenges of production and mass distribution before the economic impact of a vaccine becomes clear.
Upside was capped on growing progress over a coronavirus vaccine to aid a swift global economic recovery.
Holdings of the SPDR Gold Trust ETF fell 0.3% to 1,191.28 tonnes on Tuesday from 1,194.78 tonnes on Monday.
Domestic gold and silver recovered on Tuesday, tracking firm overseas prices.
International and Domestic Outlook
International spot gold and silver prices have started flat to marginally in the red this Wednesday morning in Asian trade.
Vaccine optimism kept upside capped, however, talks of possibility for further U.S. stimulus kept downside limited.
Technically, LBMA Gold Spot has bounced back from $1765 levels and has formed a long Bullish Candlestick which could be a sign for Bullish Reversal. Above $1802 could take prices to $1828-$1843. However below that could see correction upto $1787-$1760 levels.
LBMA Silver Spot has bounced back from $21.90 levels and formed a Long Bullish Candlestick which could be a sign for Bullish Reversal. However could see resistance near $24.10-$25.00 levels. Support is at $23.50-$22.10 levels.
Domestic bullion could start flat this Wednesday morning.
Technically, MCX Gold February did not breach below 47550 levels where it bounced back and resume above 48500 levels indicating a sideways to marginal upside momentum. Above 48350 will continue its bullish momentum up to 48800-49150 levels. However below it could drift prices 48080-47700 levels.
MCX Silver March hit a bounced from 58880 levels where its trading above 63000 levels indicating a positive momentum up to 64200-65300 levels. Support is at 62400-61600 levels.