Notwithstanding a minor correction, gold’s shine remained intact in Monday’s early trade amid hopes of an interest rate cut in June on the back of softer US economic data. The price of yellow metal in the international markets was at a two-month high while on the MCX, this bullion metal is trading at a three-month peak.
Gold has gained on softening of the dollar index (DXY) which has once again slipped below the 104 mark. Today it was trading at 103.84 against a basket of six top currencies, down by 0.02 points or 0.02%.
Taking cues from the international prices, MCX April gold futures were trading at Rs 63,482 per 10 grams, down by Rs 81 or 0.13% while the May Silver contracts were trading at Rs 72,064 per kg, lower by Rs 214 or 0.30%.
On the Comex, gold futures were trading flat at $2,091.40 per troy ounce, down by $4.30 or 0.21% while Silver futures were hovering at $23.325 per troy ounce, lower by $0.039 or 0.170%.
On Friday, the MCX Gold April contract closed at Rs 63,600, up by Rs 37 or 0.06% while the May Silver futures settled at Rs 72,272, lower by Rs 6 or 0.01%.”Spot gold surged on Friday on disappointing US ISM manufacturing data (February) that showed that manufacturing orders, production, and employment contracted in February. Even the University of Michigan’s consumer sentiment data was short of forecast. The US data released in the week ending March 1 were mostly not so encouraging,” Praveen Singh – Associate Vice President, Fundamental Currencies and Commodities at Sharekhan said. Spot gold is expected to be highly volatile this week as crucial US data like ADP, JOLTs job openings, ISM services and Friday’s nonfarm payroll data will be on tap, Singh warned. He placed support in Comex gold at $2,050 while resistance at $2,090-$2,100/$2,135 expecting a buy-on-dips trend ahead of Chair Jerome Powell’s Congressional testimony on Wednesday.
The chances of the Fed lowering rates in June have gone up and lower interest rates usually benefit the non-yielding gold, Neha Qureshi, Senior Technical & Derivative Analyst at Anand Rathi Commodities & Currencies said
On the daily timeframe, MCX Gold April futures are exhibiting a bullish pattern known as ‘three white soldiers’ followed by a higher high higher low pattern signaling potential upward momentum, Qureshi said, as she highlighted yellow metals’ bullish trend. Gold is trading above its 21 and 50-day EMAs which is acting as a support, this analyst said, placing resistance at Rs 63,800-64,200 and support at Rs 62,900-62,720.
Gold futures on the MCX have gained 1.48% or Rs 9234 per 10 grams on a month-to-date basis, Anuj Gupta, Head Commodity & Currency, HDFC Securities said. They were up by 0.45% or Rs 287 on the year-to-date basis on the closing price basis on Friday. Meanwhile, Silver futures have gained nearly Rs 828 or 1.16% in value terms in March while declining by 3.13% or Rs 2,332 on the YTD basis, the commodity and currency analyst said.
The price of gold in major physical bullion markets like Delhi, Ahmedabad and other cities is Rs 64,800 per 10 grams while that of 1 kg of Silver is Rs 74,500, Gupta said.
Intraday Trading Strategy by Neha Qureshi
– Buy MCX April Gold futures at Rs 63,500 with a stop loss of Rs 63,000 and a price target of Rs 64,200.
– Buy MCX May Silver futures at Rs 72,200 with a stop loss of Rs 71,200 and a price target of Rs 74,200.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)