Gold prices trade volatile, after hitting 8-week high in previous session; MCX gold may hit Rs 51,550 soon

In the previous session gold had touched an eight week high as sagging dollar and weaker US Treasury yields lifted demand for the safe-haven metal.

Gold prices were trading between gains and losses on Thursday in Indian markets. On MCX, gold June futures were trading marginally higher at Rs 48,260 per 10 gram, against the previous close of Rs 48,228. Silver May futures were also trading volatile, down at Rs 70,323 per kg, against the previous close of Rs 70,338 per kg. In the previous session gold had touched an eight week high as sagging dollar and weaker US Treasury yields lifted demand for the safe-haven metal. Globally, spot gold was up 0.1 per cent at $1,794.67 per ounce, after hitting its highest since February 25, 20201, at $1,797.41 on Wednesday. U.S. gold futures rose 0.1 per cent to $1,795.40 per ounce, according to Reuters, Market participants await a European Central Bank meeting due later today and a US Federal Reserve policy meeting next week.

Rajesh Palviya, Head – Technical & Derivatives Research, Axis Securities Ltd

The main driver of the gold rally has been falling US yields of Q1 highs and a tempering of inflation concerns. Gold is moving in a 100% inversely correlated manner to the US 10-year yield. However, last week positive data like retail sales and CPI have not pushed 10YT yield up as the positive data is the impact of the stimulus program by the US Government. Secondly, the data was already discounted in the first week of April and last but not the least, there are concerns that the inflation could go out of hand (target inflation is 2 per cent), possible to go beyond that. Indian currency is also depreciating against the dollar and this would impact more in MCX Gold. For MCX Gold June, it has formed a channel on daily chart and its internal advancement within the pattern suggests a rally towards its major resistance upper boundary line at Rs 49,000 which is also 200 days SMA.

Rahul Gupta, Head of Research, Emkay Global Financial Services

The US Treasury yields are still dictating the move in gold prices and gold will remain strong until Treasury yields find the balance point. Also, the rise in coronavirus cases is creating uncertainty and during such time investors tend to dump stocks and seek shelter or safe haven. These days the subdued dollar is making gold a more attractive asset. The MCX gold is nearing the resistance of Rs 49,000, if prices cross and sustains above that level then doors will be open for Rs 50,000-51,550. However, downside support is located at Rs 45,500-45,000 below which next support is at Rs 43,300.

NS Ramaswamy, Head of Commodities, Ventura Securities Ltd

Today, technically MCX Gold June is looking positive on a daily basis. However, we expect the price to face a strong hurdle zone at 48,500 levels and breaking above which price can head towards 49,000 levels for the intraday. On the downside, it may take a strong support at 47,800 levels. MCX Silver prices are looking positive for intraday. However, we expect, prices will face a strong resistance zone at 70,800 levels and breaking above which price can head towards 71,500 to 72,000 levels for intraday. On the downside, it will take immediate support at 69,700 levels after that 69,300 will act as strong support levels for the intraday.

Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers

Comex Gold rose to hover near an eight-week high as a sagging dollar and weaker U.S. Treasury yields boosted the metal’s appeal, while Silver on the MCX ended the session with more than 2% gains, closed well above Rs 70,000 for May contract. MCX gold has appreciated by 5.45% in April and adding to the bullish tone, demand from China has bounced back from low levels, with Beijing permitting domestic and international banks to import large amounts of gold into the country. Sentiment is positive but we don’t deny profit booking also. Hence, the range would be 48,000-48,400 for intra day.

Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities

Precious metals continue to invite speculation buying interest as a spike in Covid-19 infections in several regions of the world is weighing a bit on traders sentiment. Gold hit seven week high and is shy away from $1800 in COMEX while Silver hit four week high in COMEX. Weak US Dollar and steady US Treasury yield helped gold in gaining momentum as it was unable to breach $1765 since the last two months. Gold bulls next price objective is to produce a close above solid resistance at $1,800.00. We continue to remain bullish in Gold because of rising covid infection in various countries and mild tailwinds to gold in the form of weak US dollar and stable US Treasury Yields. In MCX, the weak rupee is also playing a major role in gold shooting from Rs 44,200 to Rs 48,200 in the matter of 14 trading sessions. Looking at uncontrolled surge in Covid cases in India, Indian currency will remain under pressure which will help MCX Gold. Next target for Gold is Rs 49,200 which is 200 DMA on daily chart and previous higher swing made on 2nd Feb.

(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.)