Gold prices recover in India, back above Rs 47,000; MCX gold to soon touch Rs 48,850 per 10 gm

Gold and silver saw substantial gains with gold jumping to its highest in more than a month as yields dropped for U.S. 10-year Treasury notes to 1.56%

Gold prices recovered in Indian markets on Friday, after closing above Rs 47,000 per 10 gram for the first time since February 23, 2021, in the previous session. Although MCX gold June futures were trading weak, down Rs 85 or 0.18 per cent at Rs 47,090 per 10 grams, against the previous close of Rs 47,175. MCX silver was trading at Rs 68,407 per kg, down Rs 169 or 0.25 per cent, as compared to a previous close of Rs 68,540 per kg. On April 13, MCX gold hit Rs 47,000 mark in intraday after nearly two months. Last year in August, MCX gold touched a record high of Rs 56,191 per 10 grams.

Globally, gold prices were steady on Friday as robust US economic data nullified support from lower Treasury yields, although the metal looked set to post a second straight weekly gain on the inflationary concern, according to Reuters. Spot gold was steady at $1,763.46 per ounce. US gold futures were down 0.2% to $1,763.80 per ounce. Holdings of the largest gold-backed exchange-traded-fund (ETF), New York’s SPDR Gold Trust, fell 0.3% on Wednesday from Tuesday.

Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities

Gold and Silver saw substantial gains with gold jumping to its highest in more than a month as yields dropped for U.S. 10-year Treasury notes to 1.56% (fall of 7.4 basis points). Higher inflation expectation is also one of the reasons for pushing gold prices higher looking at solid US economic recovery. In addition to that, there is a significant rise in geopolitical tension between the US and China and also the US with Russia. These events collectively could certainly be the impetus for precious metals to rally yesterday. Gold has finally breached $1753 resistance that it was unable to break since 26th Feb and after making double bottom has broken out of the range which is a good sign for bulls. The momentum might take gold till $1775-$1785 with fresh support now coming around $1722. We are positive in Gold and could see levels of Rs 47,350-47,500 within the end of this week or early part of next week. Indian Rupee has also helped MCX gold outperforming its COMEX counterpart. As long as Rs 46,300 is not breached in MCX, Gold bulls will have the upper hand and maintain a long position.

Rahul Gupta, Head of Research, Emkay Global Financial Services

This is an interesting move in gold due to a sharp drop in US Treasury yields and DXY. The drop in US yields encourages people to step up and buy some gold. Also, local rise in coronavirus cases has led to a safe-haven buying in gold. There are less signs of trend reversal also because of depreciating rupee and dovish Fed. Until the MCX Gold price is above Rs 45,000, the uptrend will continue towards Rs 47,500 and then at Rs 48,850.

Hareesh V, Research Head Commodities at Geojit Financial Services

A one month low US treasury yields and weak US dollar attracted investor interest in gold. Concerns over the economic impact of the second wave of corona pandemic also helped prices to surge towards a one and a half month high. Anyhow, a strong global equity market is likely to restrict major rallies in prices. technically, as prices cleared the resistance of $1765, buying momentum is likely to continue towards the next upside obstacles of $1820 or more. A close below $1720 is a sign of further weakness in prices.

(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.)