India Gold MCX February Futures rose on Wednesday tracking a positive trend seen in the international spot prices as the recent rally in the US dollar and Treasury yields hit a pause. The rise in COVID cases worldwide also boosted demand for safe-haven.
“Benchmark 10-year Treasury yields pulled back from 10-month highs, dragging the dollar lower and making gold cheaper for other unitholders,” said a Reuters report.
On the Multi-Commodity Exchange (MCX), February gold contracts were trading higher by 0.70 percent at Rs 49,387 for 10 grams at 0920 hours. March silver was trading 0.55 percent higher at Rs 66,266 a kilogram.
Experts are of the view that the yellow metal is likely to retain its strength but could face some pressure near Rs 49,580 while support is seen at Rs 48,660 per 10 gm.
Gold and silver settled mixed on Tuesday amid volatility in the dollar index. Gold February futures contract settled at $1844.20 per troy ounce and Silver March futures contract settled at $25.44 per troy ounce.
Both the precious metals settled on a mixed note in the domestic markets. Gold February futures contract settled at 49045 per 10 gram and Silver March futures contract settled at 65906 per one kilogram.
“Gold and silver prices traded steady to lower on Tuesday amid extreme volatility in the dollar index. Bulls are working to stabilize the two precious metals after last Friday’s big losses. There is some safe-haven demand featured this week due to potential storm clouds on the horizon,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“We expect both the precious metals could show some strength in today’s session. Gold has a support at $1830-1818 per troy ounce and resistance at $1858-1870 per troy ounce. Silver has support at $25.00-24.70 per troy ounce and resistance at $25.88-26.20 per troy ounce,” he said.
Jain is of the view that at MCX, Gold has support at 48800-48660 and resistance is placed at 49330-49580 levels. Silver has support at 65200-64700 and resistance is placed at 66600-67500 levels.
“We suggest buying in the gold around 49000 with the stop loss of 48700 for the target of 49580 and in the silver around 65500 with the stop loss of 64700 for the target of 67500 levels,” he added.
Trading Strategy:
Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold and silver prices ended higher in a choppy trading session on Tuesday as the U.S. dollar and Treasury yields eased.
Domestic gold and silver ended mixed with gold giving up gains while silver ending higher on Tuesday. Additionally, prospects of higher inflation driven by more U.S. fiscal stimulus provided further support to the metal.
Domestic bullion could trade flat this Wednesday morning, tracking the international prices. Technically, MCX Gold February took support at 48933 levels above which will continue to trade on a positive note. Resistance is at 49300-49600. Support is at 48900-487000 levels.
MCX Silver March ended on a positive note where 65000-64400 held strong support above which will continue its bullish momentum up to 66700-67200 levels.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities
COMEX gold trades about 0.9% higher near $1961/oz after a 0.4% decline yesterday. Gold trades higher supported by a retreat in the US dollar index after recent gains.
Also, supporting the price in hopes of higher US stimulus, rising virus cases, and impeachment proceedings against US President Trump. However, weighing on price is the lack of ETF buying and progress on vaccination.
Gold may remain choppy amid a lack of fresh triggers however general bias may be on the upside owing to increased stimulus expectations.
Hareesh V, Research Head Commodities at Geojit Financial Services
Prices remain volatile due to the recovering US dollar and hopes of further economic stimulus measures from the US. Increasing virus infections in many western countries may also lift the safe-haven demand of the commodity.
Technical outlook:
If the support of $1800 remains undisturbed we can expect a recovery pullback in prices. However, the immediate downside turnaround point is seen at $1780.
- Source: Money Control.com