Gold prices slipped to a two-month low on Tuesday, losing their appeal amid optimism over the debt ceiling deal and a hawkish Federal Reserve commentary hinting of an unlikely pause in the interest rate. The yellow metal was trading with a negative bias on MCX and Comex owing to strength in the Dollar Index (DXY) which was up 0.28%, above the 104 mark against a basket of top 6 currencies.
June gold futures were trading at Rs 59,390 per 10 grams on the MCX at 12:15 pm, down Rs 109 or 0.18%. Meanwhile, July Silver futures were trading Rs 299 or 0.42% lower at Rs 70,826 per kg around this time.
On the Comex, the gold futures were trading at $1,950.80 per troy ounce, down $12.30 or 0.63% while silver futures shed $0.240 or 1.03% to trade at $23.120 per troy ounce.
There is a likelihood of a rate increase by the US Federal Reserve in light of last week’s economic data which could further reduce the demand for bullion, Prathamesh Mallya, Deputy Vice President, Research, Non-Agro Commodities & Currency at Angel One said. “We expect gold to trade higher towards Rs 59,810 levels, a break of which could prompt the price to move higher to Rs 59,950 levels,” Mallya said.
Praveen Singh, Associate Vice President, Fundamental Currencies and Commodities at Sharekhan said that gold will likely trade with a bearish tilt. He sees support at $1,930 – $1,900 while resistance at $1,953 – $1,965/$2,000.
Vice President (VP), Commodity and Currency Research at IIFL Securities Anuj Gupta echoed similar sentiments on gold, recommending profit booking in the precious metals.
Gold futures on the MCX have declined 1.03% or Rs 620 per 10 grams in May, Gupta said. They are up by 7.92% or Rs 4,353 on a year-to-date basis, he said. Meanwhile, silver futures have lost nearly Rs 3,335 or 4.50% in value terms in May while they are up 2.09% or Rs 1,456 on a YTD basis, Gupta added.The price of physical gold in Delhi is around Rs 60,800 per 10 grams while that of silver is Rs 73,000 per kg, Gupta of IIFL Securities said. In Ahmedabad, 10 grams of gold is available for around Rs 60,300 while 1 kg of silver is priced at Rs 73,100, he added.
Intraday Trading Strategy by Anuj Gupta
– Sell MCX June Gold futures at Rs 59,400 with a stop loss of Rs 59,750 and price target of Rs 59,000
– Buy MCX July Silver futures at Rs 71,000 with a stop loss of Rs 71,750 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)