Gold prices rallied on Thursday, building up on gains as the US dollar index slipped below the 102 mark.
The major spoilsport for the greenback was the Federal Open Market Committee (FOMC) minutes of the March meeting released on Wednesday which indicated that the US central bank was worried about high inflation and the banking crisis in the world’s largest economy. This also augured well for the bullion, increasing its safe-haven appeal.
June gold futures were trading at Rs 60,693 per 10 grams on the MCX, up Rs 265 or 0.44%. Meanwhile, May Silver futures rose Rs 237 per kg or 0.31% to Rs 76,150 around 12:30 pm.
“We expect gold to trade higher towards Rs 61,020 levels, a break of which could prompt the price to move higher to Rs 61,340 levels,” Prathamesh Mallya, Assistant Vice President – Research, Non-Agri Commodities, and Currencies at Angel One said.
“Fed staff estimated (FOMC Minutes) that banking sector stress would tip the economy into recession, but judged that high inflation remained the priority. Gold is seen as an inflation hedge, but rising interest rates make non-yielding bullion less appealing,” Mallya added.
“FOMC minutes for the March meeting showed that the Federal Reserve officials were concerned about both banking crisis and high inflation as they see the US economy undergoing a mild recession later this year. Peak rates could be lower,” Praveen Singh, AVP Fundamental Currencies and Commodities Analyst at Sharekhan by BNP Paribas said.
“Although commodities rallied, treasuries were unfazed despite positive developments. The ten-year yields continue to hover around 3.40%,” Singh added. Gold may see some, however, dip buying is advisable, he added.Singh sees support for gold at $2000-1975 while resistance at $2032-2050.
“Gold futures hit an all-time high of Rs 61,181 per 10 grams on the MCX, last week. Meanwhile, silver is approaching its all-time high of Rs 77,949 it hit in August 2020,” Anuj Gupta, Vice President (VP), Commodity and Currency Research at IIFL Securities, said.
He also recommends a buy-on-dips strategy to investors.
Intraday Trading Strategy by Anuj Gupta
While spelling out the day’s trading strategy, Gupta advised investors with a near-term view to remain on the buying side. Correction is an opportunity to invest in bullion, he said. He sees gold prices hitting the Rs 62,000 mark in April.
- Buy MCX June Gold futures at Rs 60,600 with a stop loss of Rs 60,250 and price target of Rs 61,100.
- Buy MCX May Silver futures at Rs 75,750 with a stop loss of Rs 74,900 and price target of Rs 77,000.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)