Gold prices edge higher, follow international market; check MCX gold resistance, support levels

Gold prices saw routine downside correction yesterday after five days of gain. Image: reuters

Gold prices were trading firm on Friday, following international markets as a softer US dollar, falling Treasury yields and a dip in equities increased yellow metal’s safe-haven appeal. MCX gold June futures were trading Rs 76 or 0.16 per cent up at Rs 47,848 per 10 gram. In the previous session MCX gold settled at Rs 47,772. Similarly, silver May futures were ruling at Rs 69,284 per kg, up Rs 66 or 0.10 per cent, as against the previous close of Rs 69,218 per kg. Globally, spot gold was up 0.2 per cent at $1,787.11 per ounce, after hitting its highest since February 25, at $1,797.67 on Thursday. The metal has gained about 0.6% so far this week, according to Reuters.

Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities

Gold prices saw routine downside correction yesterday after five days of gain. Bulls are still enjoying near term price uptrend in daily chart despite yesterday’s mild profit booking. We expect gold prices to remain strong going forward because worldwide inflation is increasing despite US CPI showing very minor uptick. CPI is not showing the whole picture as the data is based on basket of consumer goods which during this pandemic, consumers may not have spend like going out in restaurant. Commodity and realty prices are increasing at an unprecedented rate which is showing in increasing US Treasury yields.

We believe gold market has yet not factored in increase in inflation and that is why we are bullish in gold near term. Equity market sentiment also took turn after US President Biden’s new tax proposal to raise the federal income tax for those individuals making over $1 million per year to almost 50%. This proposal if implemented could fuel another rally in gold. As such, we would expect any shallow dip in gold prices to be short-lived at best. So buy on dips is recommended for short term. Support for gold in MCX comes at Rs 47,450 which would be ideal level to go long with stoploss of Rs 47,000 and target of Rs 48,200.

Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities

COMEX gold trades marginally higher near $1787/oz after a 0.6% decline yesterday. Supporting gold price is rising virus cases, choppiness in the equity market amid concerns about US corporate tax and ECB’s emphasis on continuing with loose monetary policy. However, weighing on price is the lack of ETF buying and concerns about Indian demand and improving outlook for the US economy. Gold is struggling to break past the $1800/oz level amid choppy US dollar however general bias remains positive amid rising virus concerns.

Hareesh V, Research Head Commodities at Geojit Financial Services

A softer US dollar, falling Treasury yields and a correction in equities attracted investor interest in bullion. Concerns over the fiscal impact of the second wave of corona pandemic also helped to gain momentum. Meanwhile, signs of economic recovery in key economies are likely to dent major gains in the commodity. As long as prices stay above $1765, the buying momentum is likely to continue towards the next upside obstacles of $1820 or more. A close below $1720 is a sign of immediate trend reversal.

Sriram Iyer, Senior Research Analyst at Reliance Securities

Downside remained capped supported by a major uptick in Covid-19 infections in certain global hotspots and economic contraction in certain countries worldwide. International spot gold and silver prices have started higher this Friday morning in Asian trade tracking the falling US Treasury yields and a weaker dollar. Technically, MCX Gold June supports are at Rs 47,500 and Rs 47,700. Resistances are at Rs 48,200 and Rs 48,500. MCX silver above Rs 68,500 indicating for upside movement up to 70,000-71,700 levels. Support is at 68,400-67,600 levels.

(The views in this story are expressed by the respective experts of research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)