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After a dip in prices on Monday and Tuesday, the price of the yellow metal rose in early trade on July 28. The price of gold (24 carat) stands at Rs 47,914, up by Rs 217 from Rs 47,697 on Tuesday, according to the rate of Indian Bullion and Jewellers Association (IBJA). The price of 22 carat gold also jumped by Rs 210 to Rs 43,900/10 grams from Rs 43,690 on July 27. Unlike gold, price of silver is down by almost Rs 800/kg amid volatility in international markets.

Drop in USD index

“Gold prices are near steady and silver dropped sharply to a nearly four-month low in midday US trading on Tuesday. Gold saw limited selling interest across the globe amid a drop in the US dollar index on this day, but silver got no benefit. In focus is the two-day meeting of the Federal Reserve’s Open Market Committee (FOMC) that began Tuesday morning and ends Wednesday afternoon with a statement,” said Amit Khare, AVP, research commodities, Ganganagar Commodities Ltd.

Silver witnessed a sharp drop in price on Wednesday. Silver dropped by Rs 790 to Rs 66,430 from Rs 67,220 per kg in early trade on July 28. Silver traded around Rs 67,250 per kg level since Monday.

“Gold and silver are trading near oversold zone as per hourly chart and giving buying signal on the daily chart, momentum indicator RSI also indicating the same. Silver is looking stronger than gold in daily chart and creating a positive divergence in daily chart,” Khare added.

Imports

Earlier this week, commerce ministry data revels that gold imports jumped more than 11 times to $7.9 billion (Rs 58,573) crore during the April-June quarter of FY22, the high number being attributed to the low base effect in the wake of the Covid-19 pandemic.

Silver imports, however, dipped by almost 94% per cent to $39.4 million in Q1 of the current financial year.

“Gold is trading almost unchanged ahead of the FOMC outcome while the market participants will keep sharp eye on inflation and economic growth prospects. Precious metal is trading below the confluence point of $1800 and lack of optimism is clearly visible on price action. Our outlook for today’s trade is neutral to bullish due to lack of over optimism from FOMC meeting outcome however traders should be ready to higher volatility either side in next few days,” said Sandeep Matta, founder, TRADEIT Investment Advisor.