MCX silver futures hit a seven-month high on Thursday while gold futures built up on their Wednesday gains aided by the US Federal Reserve’s dovish commentary and a 25 bps rate hike, which was on expected lines. A bouquet of triggers, including the slipping of the US dollar, lower bond yields and the safe-haven appeal of bullion came into play.
MCX Silver futures surpassed their previous 7-week high of Rs 68,185 and were trading at Rs 69,781 in early trade. They were up by Rs 472 per kg or 0.68%. Meanwhile, the April Gold futures were trading at Rs 59,215, higher by Rs 459 or 0.78% per 10 grams.
Anuj Gupta, Vice President (VP), Commodity and Currency Research at IIFL Securities, said that the outcome of Fed’s FOMC meeting has lent strength to the bullion.
Dollar index is at its 7-week low level and headed towards 101 to 98 levels, he said, estimating a further uptick in the prices.
Amid current uncertainties, the safe haven appeal of gold and silver has strengthened, Gupta said.
Gupta said that gold futures have gained 6.89% on a year-to-date (YTD) basis and 5.07% on a month-to-date basis. As for silver futures, the gains in March are over 6% while on a YTD basis, they are at negative 0.14%.
Silver has recovered from YTD declines of over 11% and a significant upside will open if it breaches its 52-week high of Rs 72,769, the IIFL Securities analyst said.Comex Gold futures ended at $1,980, up by $30.40 or 1.56% on Wednesday while silver futures settled at $23.105, up $0.319 or 1.40%.
“Gold logged 1.55% daily gain on Wednesday, as US Treasury Secretary Janet Yellen’s comments suggesting no out-of-the-line support for the United States banks seem to weigh on the Treasury bond yields and propel the XAU/USD price. The yellow metal surged with 1.26% daily gain and closed at $1970 mark for the day,” Marc Despallieres, Chief Strategy and Trading Officer at Vantage said.
XAUUSD is a symbol that indicates how many US dollars a trader would require to buy an ounce of gold.
Intraday Trading Strategy by Anuj Gupta
– Buy MCX April Gold futures at Rs 58,500 with a stop loss of Rs 58,250 and a price target of Rs 59,300.
– Buy MCX May Silver futures at Rs 69,000 with a stop loss of Rs 68,450 and price target of Rs 70,000
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)