Bullion traded negative in the opening trade on Tuesday amid weakness in Dollar Index (DXY) that led to rupee appreciation. A weaker dollar aids importers of bullion as the dollar-priced commodities become cheaper, denting the prospects of bullion prices on the exchanges. In the physical markets, prices are expected to come down.
The DXY fell to a 9-week low below the 102 mark against 6 top currencies.
The August gold futures were trading at Rs 58,638 per 10 gram on the MCX around 9:15 am and were down by Rs 51 or 0.09% from the Monday closing price. Meanwhile, September silver futures were trading at Rs 71387, higher by Rs 22 or 0.03%. Gold futures ended in the red on Monday while silver futures closed with minor gains.
On the Comex, gold futures were trading at $1,933 per troy ounce on Tuesday, up by $2 or 0.10% while Silver futures trading at $23.400, higher by $0.055 or 0.240%.
Dollar index’s fall augurs well for the yellow metal in the short term and investors can look to buy gold and silver futures now, Anuj Gupta, Vice President (VP), Commodity and Currency Research at IIFL Securities said.
Commenting on the fall in MCX gold futures, Gupta said that the lower import prices will bring down prices of physical gold but have a negative impact on futures which trade on the exchanges.
On the trajectory of DXY, Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP said, “The dollar index fell to 101.74 as the Asian currencies rose against the dollar with CNH rising to 7.2158, KRW to 1,291 and IDR which fell to 15,155. The Wall Street rose overnight after FED officials said that interest rates will be required to be raised to bring down inflation which is still too high, but an end to the current tightening cycle is getting close”. He expects the INR to trade in the range of 82.35-82.65 against the USD. Gold futures on the MCX have gained by 0.84% or Rs 486 per 10 gram on the month-to-date basis, Gupta said. They were up by 6.71% or Rs 3,689 on the year-to-date basis as on Monday, July 10 on the closing price basis, he added. Meanwhile, Silver futures have gained nearly by Rs 1,355 or 1.94% in value terms in July while gaining by 2.89% or Rs 2,005 on the YTD basis, the IIFL analyst said.
Price of physical gold in bullion markets in Delhi-NCR is around Rs 60,200 per 10 gram while that of Silver is Rs 73,500 per kg, Gupta said.
Intraday Trading Strategy by Anuj Gupta
– Buy MCX August Gold futures at Rs 58,400 with a stop loss of Rs 58,200 and price target of Rs 58,900
– Buy MCX September Silver futures at Rs 71,500 with a stop loss of Rs 70,800 and price target of Rs 73,000.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)