Gold extended losses on Tuesday amid strength in the dollar index (DXY) which has shot up to its eight-week high. The better than expected US jobs data has dashed Street’s hopes of an imminent rate cut by the Federal Reserve strengthening the greenback.
Taking cues from the global price trends, the MCX April gold futures were trading at 62,258 per 10 grams at 9:10 am, down Rs 58 or 0.09%, and the March Silver contracts were down Rs 45 or 0.06% at Rs 70,435 per kg.
On the Comex, gold futures were trading at $2,042.40 per troy ounce, down by $0.50 or 0.02%, while Silver futures were hovering at $22.440 per troy ounce, up by $0.018 or 0.080%.
The dollar index (DXY) was trading slightly at 104.38 against a basket of six top currencies, up by 0.08 points or 0.07%. It has appreciated by 0.95% over the past five trading sessions.
On Monday, the MCX Gold April contract closed flat at Rs 62,312, down by Rs 4 or 0.01% while the March Silver futures settled at Rs 70460, lower by just Rs 20 or 0.03%.”Gold and silver prices corrected sharply on Monday amid strength in the dollar index following Fed’s FOMC which stated that the committee was not in a hurry to cut rates. This led to the dollar index hitting its 8-week highs while the positive economic data has further provided support to the dollar index,” Anuj Gupta, Head Commodity & Currency, HDFC Securities said.Gupta sees Comex gold trading at $2,015-$2,030 and MCX gold at Rs 62,000 to 62,600 levels. As for Silver, the March contract is expected to trade between Rs 69,500 and Rs 72,000, this analyst said.
Gold’s year-to-date (YTD) losses are at Rs 887 per 10 gram or 1.40% while month-to-date (MTD) declines stand at Rs 419 or 0.67%, Gupta informed. As for Silver, the YTD declines stand at Rs 3950 per kg or 5.31% while MTD declines at Rs 1,767 or 2.45, he added.
“On the daily chart, the April contract for MCX Gold has broken out of its downward trend channel but failed to stay above 62,950, which is also the support level of the 50-day Double Exponential Moving Average (DEMA). It faced resistance at this level, suggesting a potential correction might occur. The Relative Strength Index (RSI) indicates a negative divergence, hinting at a bearish outlook,” Neha Qureshi, Senior Technical & Derivative Analyst at Anand Rathi Commodities & Currencies said.
The Anand Rathi analyst sees key resistance at Rs 62,650-62,900 while support at Rs 62,100-61,800.
The price of gold in major physical bullion markets like Delhi, Ahmedabad and other cities is Rs 63,000 per 10 grams while that of 1 kg of Silver is Rs 72,000.
Intraday Trading Strategy by Neha Qureshi
– Sell MCX April Gold futures at Rs 62,300 with a stop loss of Rs 62,600 and a price target of Rs 61,800.
– Sell MCX March Silver futures at Rs 70,500 with a stop loss of Rs 71,500 and a price target of Rs 69,000.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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