Following a high of Rs 75,049 on Tuesday, Gold October futures contracts at MCX soared to a new all-time high of Rs 76,000 per 10 grams, reflecting an increase of 0.24% or Rs 177.
Gold prices have been surging for a week now post the US Fed cut rates by 50 bps, going up by Rs 2,900 per 10 grams.
Meanwhile, silver December futures contracts were trading at Rs 92,221/kg, down by 0.19% or Rs 172. The same has gained Rs 3,900/kg in one week.
“Gold prices hit record highs on Tuesday, extending a recent run of gains amid persistent optimism over U.S. interest rate cuts, with focus turning to more upcoming cues this week. Another fresh reason is that the Chinese government announced a barrage of stimulus measures, raising hopes of an economic recovery,” said Anuj Gupta of HDFC securities.
Along with a bumper rate cut of 50 bps by the Federal Reserve last week, concerns regarding further ease off in the labour market and revised dot plot increased the prospect of further cuts presenting more upside for the yellow metal.
“On the data front, preliminary manufacturing PMI numbers were reported lower than estimates in major economies. US consumer confidence data was also reported lower at 97 v/s expectations of 103.9 supporting the rally in bullion,” said Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal.Several Fed officials said that they supported the bank’s 50 bps cut last week, but expected its pace of cuts to slow in the coming months. This week along with Governor Powell we have more than 9 other Fed officials scheduled to speak. Any change in tone from the recent Fed meeting could trigger volatility in prices, Modi added.Today, the US Dollar Index, DXY, was hovering near the 100.28 mark, falling 10.19 or 0.19%.
Distress in the Middle East between Hezbollah and Israel has also increased. Hezbollah evening confirmed Israel had killed one of its top commanders, Ibrahim Qobeissi, in an air strike that rocked the southern suburbs of Beirut.
Modi further believes that the attacks from Israel killed more than 500 people and a further escalation and updates could boost safe haven appeal for gold and silver prices.
“The daily chart of MCX Gold October futures reveals a robust uptrend, with prices moving above an ascending trendline and consistently forming higher highs and higher lows. A bullish engulfing candlestick pattern has emerged, signaling continued bullish momentum. The price is also trading above the 21-day Exponential Moving Average (EMA), highlighting the ongoing upward trend. Additionally, the RSI shows positive divergence, reinforcing the bullish outlook. Key resistance levels are located at 75,500 and 75,700, while important support zones are marked at 74,730 and 74,440,” said Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies.
Intraday Trading Strategy by Neha Qureshi
- Buy MCX October gold futures at Rs 75,000 with a stop loss of Rs 74,700 and a price target of Rs 75,500
- Buy MCX December silver futures at Rs 92,400 with a stop loss of Rs 91,000 and a price target of Rs 95,000
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)