Gold futures slipped below the Rs 60,000 mark on Thursday on stronger dollar index which breached the 103 mark against a basket of six major currencies. The hawkish stance from the US Federal Reserve also dented the appeal of bullion.
The yellow metal on MCX slipped, taking cues from the correction in international prices. At 2 pm, the June gold futures were trading at Rs 59,992 per 10 grams on the MCX, down Rs 153 or 0.25%. Meanwhile, the July Silver futures were trading at Rs 72,040 per kg, Rs 618 or 0.85% lower around this time.
On Comex, gold futures were trading at $1,975.10 per troy ounce, lower by $9.80 or 0.49% while Silver futures were trading at $23.590 per troy ounce, down by $0.307 or $1.280%.
“Gold continued to inch lower as the dollar advanced after hawkish comments from US Federal Reserve officials raised doubts over a slowdown in interest-rate hike in the coming meetings,” Navneet Damani, Senior VP – Commodity Research at Motilal Oswal Financial Services.
“Few Fed Governors continue to maintain a hawkish stance, amidst concerns regarding inflation, which is still far away from their target of 2%,” he said.
On Tuesday, Chicago Fed President Austan Goolsbee said it was premature to discuss rate cuts, while Atlanta Fed President Raphael Bostic said the Fed would need to stay “super strong” in fighting inflation even if the unemployment rate starts to rise later in the year, Reuters reported.
Moreover, an assurance from the Biden administration about the likelihood of a deal being reached between the Democrats and Republicans on the issue of debt ceiling ahead of the June 1, 2023 deadline, calmed the nerves.US Treasury yields rose amidst optimism around the development in the US debt ceiling issue and on the back of higher interest rate expectations.
Broader trend on COMEX could be in the range of $1965- 2000 and on domestic front prices could hover in the range of Rs 59,700- 60,500 could be expected, Damani said.
Vice President (VP), Commodity and Currency Research at IIFL Securities Anuj Gupta sees the correction as a buying opportunity. He said that the medium to long term prospects remain bright for the yellow metal.
MCX Gold futures have gained 9.40% or Rs 5,170 on the year-to-date basis while 0.33% or by Rs 197 on the month-to-date basis, Gupta said. As for silver futures, the YTD gains stood at 4.75% or Rs 3,296 as of Wednesday closing price while this precious metal has lost nearly 2.01% or Rs 1,492 in May.
Intraday Trading Strategy by Anuj Gupta
– Buy MCX June Gold futures at Rs 59,900 with a stop loss of Rs 59,600 and price target of Rs 60,400
– Sell MCX July Silver futures at Rs 72,500 with a stop loss of Rs 73,100 and price target of Rs 71,300.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)