Gold is expected to remain range bound over the next week in the absence of any clear triggers. The yellow metal ended flat while silver closed with declines dragged by the dollar index which managed to breach the 102 mark against the basket of six major currencies. The price is expected to move between support and resistance levels.
On Friday, the MCX June gold futures ended flat at Rs 60,898 per 10 gram, though with a positive bias. July Silver futures were down by Rs 73,100 per kg and were down by Rs 708 or 0.96%.
“Gold prices have been struggling to gain momentum and have remained weak, trading below the Rs 61,000 level. This could be attributed to a combination of factors such as weak market sentiment caused by concerns over the US debt crisis and the recent PPI data from the US,” Jateen Trivedi, Vice President, Research Analyst at LKP Securities said.
“The bullion prices corrected last week due to low retail demand and higher dollar index,” Anuj Gupta, Vice President (VP), Commodity and Currency Research at IIFL Securities, said.
Benign US inflation lowered the appeal for yellow metal, Gupta said.
He sees support for MCX gold at Rs 60,400 – Rs 59,800 while resistance at Rs 61,500 – Rs 62,500.
Meanwhile, July Silver futures will find support at Rs 72,000 – Rs 70,500 and resistance at Rs 75,000 – Rs 76,500.Gupta said that the long term trend remains positive for gold though the yellow metal is expected to trade between support and resistance as the pendulum moves between bulls and the bears.
Comex Gold
Gold futures on the Comex are currently hovering near a strong support level of $2,000 and a break below this level, if sustained, could further weaken the sentiment and bring in more bearish sentiments into the gold market, Trivedi said.
The upcoming policy decision of the Federal Reserve in June is likely to be a key trigger for the gold prices, and any hints of a hawkish stance could further weaken the sentiment in the gold market, the LKP Securities analyst said.
Gupta sees support for Comex gold at $1,980 – $1,950 while resistance at $2,030 – $2,055. Meanwhile for Comex Silver, support is seen at $22.20 – $21.50 while the resistance at $24 – $24.80.
Lower industrial demand is putting a pressure on the Silver.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)