Gold prices flat as international prices fall on strong US data; where is MCX gold headed?

Mixed data came from the US economy, however, lower interest rates will provide support for gold and silver

Gold was trading flat to negative on Friday, mirroring the trend in international spot prices where strong US economic data and elevated Treasury yields dampened the yellow metal’s appeal. On the Multi Commodity Exchange, gold June futures were trading Rs 25 down at Rs 46,701 per 10 gram, as against the previous close of Rs 46,726. Silver July futures were also flat at Rs 68,627 per kg, down from the previous close of Rs 68,637. Analysts say that the trend in dollar has been pretty bearish as the rupee has appreciated in recent sessions. Otherwise, the subdued dollar, dovish Fed and massive stimulus bill announced by Biden are positive for gold. “Currently MCX gold price is hovering near the crucial 46600 zone, if it falls below that then the downtrend may continue till 45000. However, a reversal may again push prices to 48000,” Rahul Gupta, Head of Research, Emkay Global Financial Services, told Financial Express Online.

Globally, spot gold slipped 0.3 per cent to $1,765.15 per ounce, down nearly 0.6 per cent so far in the week. US gold futures were down 0.1% to $1,765.60 per ounce. Despite the decline, bullion was poised for its first monthly gain of this year, having jumped to a two-month high of $1,797.67 on April 22, according to Reuters. Benchmark US 10-year Treasury yields hovered near a more than two-week high, increasing the opportunity cost of holding non-yielding bullion.

Back in the domestic market, gold and silver prices corrected sharply in the previous session. The US GDP rose 6.4 per cent sequentially in the first quarter of 2021 and 5.53 lakh initial jobless claims were filed over the past week, with government support. “Mixed data came from the US economy, however, lower interest rates will provide support for gold and silver. For today we expect some profit booking in gold and silver over positive US GDP data,” Anuj Gupta, VP — Commodity and Currencies Research, IIFL Securities, told Financial Express Online. He advised traders to go for ‘sell’ in gold at Rs 46,800 with the stop loss of Rs 47,100 for the target of Rs 46,300 per 10 gram. “They can also go for sell in silver at Rs 68,900 with the stop loss of Rs 69,400 for the target of Rs 67,500,” he added.

(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.)