Gold prices were hovering at two month lows with an unrelenting greenback, triggering the slide.
The MCX October gold futures were trading down by Rs 182 or 0.31% from the Tuesday closing price at Rs 58,250 per 10 gram on the MCX while the December Silver futures were trading at Rs 71,110 per kg, lower by Rs 667 or 0.93%.
On Comex, Gold futures were trading at $1,914.40 per troy ounce on Wednesday, down by $5.40 or 0.28% while Silver futures were at $22.950, lower by $0.246 or 1.060%. The comex prices are at a month lows.
A rising dollar index (DXY), which is now at its 10 month peak, has engineered the fall in bullion prices. It is currently above the 106 mark against six major currencies.
“Gold prices went down sharply on Thursday correcting by 1.59% to close at Rs 58,432. Dollar Index is trading at a 10 month high level at 105.90 levels and it is putting pressure on gold as demand is shifting from gold to dollar,” Anuj Gupta, Head Commodity & Currency at HDFC Securities, of HDFC Securities told ETMarkets. He sees Comex gold testing $1,895-$1,890.
Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies sees MCX October Gold futures currently forming an M-pattern on the daily charts, which indicates a bearish activity. It’s trading near its neckline, which is at the breakdown level of Rs 58,275 and if this neckline is breached, we may see bearish trends, further, she said.
“The price is currently trading below both its 50 and 100 days Exponential Moving Averages (EMA), which are acting as strong resistance levels. The MACD indicator has given a negative crossover, indicating a bearish trend. Additionally, the RSI has shown negative divergence, suggesting a potential move to the downside,” Qureshi said. She sees resistance at Rs 58,800-59,300 while support at Rs 58,275-57,651.Gold futures are down 1.59% or by Rs 942 on the month-to-date basis while they have gained 6.21% or by Rs 3,415 on the year-to-date basis, Gupta said.
As for silver futures, the declines are to the tune of 5.16% or Rs 3,905 in September while the gains this year stand at 3.41% or Rs 2,364, he said.
The physical price of gold in top Indian cities like Delhi and Ahmedabad is around Rs 59,300 per 10 gram while Rs 73,500 for silver.
Intraday Trading Strategy by Neha Qureshi
– Sell MCX October Gold futures at Rs 58,500 with a stop loss of Rs 58,800 and a price target of Rs 58,000.
– Sell MCX December Silver futures at Rs 72,000 with a stop loss of Rs 73,000 and a price target of Rs 70,000.
Intraday Trading Strategy by Anuj Gupta
Gupta sees gold trading between $1,915 and $1905 on the Comex while at Rs 58,400-59,000 on the MCX while not ruling out further slippages to $1,910-$1,905 amid continued strength in the dollar index.
– Sell MCX October Gold futures at Rs 59,025 with a stop loss of Rs 59,125 and a price target of Rs 58,780
– Sell MCX December Silver futures at Rs 72,050 with a stop loss of Rs 72,580 and a price target of Rs 71,300.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)