Gold traded in the red on Thursday amid a stronger dollar index (DXY) which shot up to 105.63 against six major currencies, up 0.43% after US Federal Reserve Chair Jerome Powell hinted of another rate hike this year while maintaining that the high interest rate regime is there to stay longer.
The MCX October gold futures were trading down by Rs 356 or 0.60% from the Wednesday closing price at Rs 59,049 per 10 gram on the MCX while the December Silver futures were trading at Rs 72,290 per kg, higher by Rs 940 or 1.28%.
Dollar Index (DXY) crossed the 105 mark on Monday against the basket of six top currencies and was down by 0.07%.
On Comex, Gold futures were trading at $1,945 per troy ounce on Thursday, down by $21.70 or 1.10% while Silver futures were at $23.350, lower by $0.486 or 2.040%.
The October Gold futures had ended with gains of Rs 100 or 0.17% per 10 gram at Rs 59,382 on Wednesday while the December Silver futures closed lower at Rs 73,249, up by Rs 680 per kg or 0.94% on a holiday curtailed trading session.
“The US Federal Reserve, as largely expected, skipped a rate hike at its FOMC monetary policy meeting concluded yesterday. However, the Federal Reserve’s stance was hawkish as the Central Bank increased the projected rate for 2024 to 5.10% from 4.60%, which implies a rate cut of 50 bps as against the previous estimate of a 100 bps rate cut,” said Praveen Singh – Associate Vice President, Fundamental Currencies and Commodities, Sharekhan.
Singh said that markets will be closely watching the Bank of England’s monetary policy decision, scheduled later today adding that a dovish 25 bps hike will further pressurise the Sterling Pound. “Gold is vulnerable on stretched valuation as yields and Dollar rise on a resilient US economy,” he said while placing support at $1,915-$1,900 and resistance at $1,950-$1,965.Gold futures are down 0.05% or by Rs 31 on the month-to-date basis while they have gained 8.08% or by Rs 4,388 on the year-to-date basis, Anuj Gupta, Head Commodity & Currency at HDFC Securities, of HDFC Securities told ETMarkets.
As for silver futures, the declines are to the tune of 3.24% or Rs 2,452 in September while the gains this year stand at 5.50% or Rs 3,817, he said.
Commenting on the technicals, Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies said that the Gold October futures appeared to be shaping a W-pattern breakout, with the neckline at the Rs 59,670 level.
“This pattern suggests a potential bullish trend in the market. Currently, Gold is trading above its 50-day and 100-day Exponential Moving Averages (EMA), indicating positive momentum,” she said.
Her strategy is a buy on gold and silver futures. She sees resistance at Rs 59,670-60,000 while support at approximately Rs 59,000- 58,670.
The physical price of gold in top Indian cities like Delhi and Ahmedabad is around Rs 60,800 per 10 gram while Rs 75,500 for silver.
Intraday Trading Strategy by Anuj Gupta
– Sell MCX October Gold futures at Rs 59,500 with a stop loss of Rs 59,750 and a price target of Rs 59,200
– Sell MCX December Silver futures at Rs 72,900 with a stop loss of Rs 73,350 and a price target of Rs 72,900.
Intraday Trading Strategy by Neha Qureshi
– Buy MCX October Gold futures at Rs 59,350 with a stop loss of Rs 59,000 and a price target of Rs 59,800.
– Buy MCX December Silver futures at Rs 73,000 with a stop loss of Rs 72,000 and a price target of Rs 75,000.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)