Gold traded with declines on Wednesday amid a stronger dollar index (DXY) which stayed at an eight-week high level. 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 62,504 per 10 grams at 9:20 am, down Rs 70 or 0.11%, the March Silver contracts were down by Rs 179 or 0.25% at Rs 70,415 per kg.
On the Comex, gold futures were trading at $2,050.80 per troy ounce, down by $0.60 or 0.03%, while Silver futures were hovering at $22.395 per troy ounce, up by $0.083 or 0.370%.
The dollar index (DXY) was trading slightly at 104.10 against a basket of six top currencies, up by 0.11 points or 0.10%. It has slightly narrowed its gains by 0.80% over the past five trading sessions.
On Tuesday, MCX Gold April contract closed flat at Rs 62,546, down by Rs 28 or 0.04% while the March Silver futures settled at Rs 70,535, lower by just Rs 59 or 0.08%.Gold’s year-to-date (YTD) losses are at Rs 629 per 10 gram or 1% while month-to-date (MTD) declines stand at Rs 161 or 0.26%, Anuj Gupta, Head Commodity & Currency, HDFC Securities informed. As for Silver, the YTD declines to stand at Rs 3,836 per kg or 5.15% while MTD declines at Rs 1,653 or 2.29, he added. “Gold prices in China are at an all-time high as the Lunar New Year approaches, but people are still eager to buy it. Despite a stock market crash and economic uncertainty, gold’s reputation as a reliable investment is attracting more customers, including younger ones. The difficulty of investing money outside of China and the lack of other investment options are boosting gold’s appeal,” Neha Qureshi, Senior Technical & Derivative Analyst at Anand Rathi Commodities & Currencies said.
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), Qureshi said, adding that it faced resistance at this level, suggesting a potential correction could occur. The Relative Strength Index (RSI) indicates a negative divergence, and hints at a bearish outlook, she added.
The Anand Rathi analyst sees resistance at Rs 62,650-62,900 with support at Rs 62,100-61,800.
The price of gold in major physical bullion markets like Delhi, Ahmedabad and other cities is Rs 63,500 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 62,600 with a stop loss of Rs 62,900 and a price target of Rs 62,000.
– 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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