Gold prices on MCX for August futures contracts fell by Rs 3,400 in the last 20 days and opened at Rs 71,012 per 10 grams while MCX July silver contracts experienced a sharp decline of Rs 6,000 in the same time period to open at Rs 89,474 per kg.
Gold dropped 3.7%, its largest decline since August 2021, while silver fell 7%.
Gold prices fell below $2,300 an ounce, experiencing the steepest drop in nearly three years due to a strong US jobs report. This report reduced hopes for imminent Federal Reserve rate cuts, causing Treasury yields and the dollar to surge.
Fed officials need more evidence of easing inflation before considering rate cuts, which typically boost non-interest-bearing assets like gold.
Gold previously reached a record high above $2,450 an ounce but has since fluctuated due to uncertainty over the Fed’s rate decisions.“Base metals also fell, with copper and zinc experiencing significant declines. Earlier on Friday, gold was already declining as China’s central bank paused its gold buying spree after 18 months, impacting the metal’s rally. Despite the pause, China is expected to continue purchasing gold to diversify reserves and guard against currency depreciation,” said Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies.Today, the US Dollar Index, DXY, was hovering near the 105.19 mark, rising 0.30 or 0.29%.The daily chart for MCX Gold August has broken down from its rising channel and formed a bearish engulfing candlestick pattern, signaling bearish sentiment. It has also fallen below its 21 EMA, indicating further weakness. The RSI is displaying negative divergence, underscoring the weakness. Key resistance levels to watch are at 71,800 and 72,400, while support levels are at 70,900 and 70,082, added Qureshi.
Intraday Trading Strategy by Neha Qureshi:
– Sell MCX AUGUST Gold futures at Rs 71,300 with a stop loss of Rs 71,800 and a price target of Rs 70,700
– Sell MCX JULY Silver futures at Rs 89,000 with a stop loss of Rs 90,000 and a price target of Rs 87,000
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