Gold prices MCX rose by Rs 102 or 0.14% to trade at Rs 72,785 per 10 grams while MCX May silver contracts were up by Rs 112 or 0.13% to Rs 83,385 per kg on Friday amid rising geopolitical concerns.
On Thursday, gold June futures contract settled at Rs 72,683 per 10 grams while the silver May futures contract settled at Rs 83,851 per kilogram with a gain of 1.25%. Gold is expected to trade with a positive bias in the near term unless geopolitical tensions subside.
The US retail sales advance (March) data blew out figures across the board as the headline retail sales rose 0.70% versus the forecast of 40% as prior data was revised higher to 0.90% from 0.60% reported earlier. The US yields rose to their highest levels in 2024, which sent gold to the day’s low at $2325. However, the yellow metal recovered sharply on concerns about Israel’s retaliation to Iran’s attack as the former reportedly intends to give a befitting reply to the latter’s aggression.
Spot gold closed with a gain of around 1.80% at $2388 as its intra-day to and fro swings amounted to a move of over $100.
Today, the US Dollar Index, DXY, was hovering near the 106.24 mark, rising 0.09 or 0.08%.
“Gold prices surged past $2,400 per ounce due to increased demand for a safe investment amid escalating tensions between Israel and Iran. The price of gold increased by 1.3% and is on track for its fifth consecutive weekly gain, influenced by unconfirmed reports of explosions in Iran, Syria, and Iraq. This rise in gold prices coincides with heightened rhetoric following a drone and missile strike, with Iran warning against attacks on its nuclear facilities and threatening retaliation,” said Neha Qureshi, Senior Technical & Derivative Analyst of Anand Rathi Commodities & Currencies.“Despite strong job data suggesting ongoing high-interest rates which typically discourage investment in non-interest-bearing assets like gold, geopolitical uncertainties have continued to bolster gold’s appeal. Additionally, strong demand from central banks and Chinese consumers has supported the upward trend in gold prices. Spot gold rose 1.1% to $2,404.95 an ounce in early trading in Singapore,” added Neha Quereshi.
On the daily chart, the June gold futures have formed a bearish engulfing candlestick pattern, suggesting a potential downturn. The Relative Strength Index (RSI) has entered the overbought territory and is displaying negative divergences, which supports the bearish outlook. The key resistance levels to watch are at 73,300 and 73,958, while the support levels are situated at 72,020 and 71,700, she said.
Intraday Trading Strategy by Quereshi:
– Sell MCX JUNE Gold futures at Rs 72700 with a stop loss of Rs 73200 and a price target of Rs 72000
– Sell MCX MAY Silver futures at Rs 83300 with a stop loss of Rs 84300 and a price target of Rs 81300
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)