Gold hit a new lifetime high of Rs 71,150 per 10 gram on the MCX on Tuesday in the early trade taking cues from the international prices. At 10 am, the June gold futures were trading at Rs 71,130 and were up by Rs 218 or 0.31% over the Monday closing price.
Meanwhile, May silver contract was trading marginally lower at Rs 81,814, down by Rs 61 or 0.07%.
The gains in bullion prices have been on hopes of interest rate cuts by the US Federal Reserve and global central banks’ heightened buying of the yellow metal. The Street will now be tracking developments around the US FOMC minutes which are scheduled for release on Wednesday.
The recent uptick has been on account of slippages in the dollar index (DXY) which has declined by 0.63% over the last five trading sessions. Today it was hovering near the 104.16 mark, up by 0.02 or 0.02%.
The June Gold futures on MCX ended at Rs 70,931 on Monday, higher by Rs 19 or 0.03%. Meanwhile the May silver futures scripted a life high of Rs 82,109 per kg before closing the Monday session at Rs 81,875.
On Comex, the gold futures have scripted a lifetime high of $2,372 per troy ounce. Anuj Gupta, Head Commodity & Currency, HDFC Securities expects the gold rally to likely continue and Comex gold could move towards $2,370 and $2,400 in the short term. in his view. As for MCX gold, the June contract has resistance at Rs 72,650-73,555 with support placed at Rs 69,200-69,022.
The prices have risen by 4.78% or Rs 3,235 on MCX in April so far, Anuj Gupta, Head Commodity & Currency, HDFC Securities said. On the year-to-date basis, the uptick is Rs 7,709 or 12.20%.
As for the Silver contract, this month’s gains stand at 9.10% or Rs 6,827 while the YTD gains at 10% or Rs 7,445, Gupta added.
Price of gold in major physical bullion markets like Delhi, Ahmedabad and other cities is Rs 71,300 per 10 gram while those of 1 kg of Silver is Rs 82,500, Gupta said.
“Gold prices are very high right now, almost reaching $2,340 per ounce. People are watching the US inflation data closely because it might indicate if interest rates will go up or down. If inflation is slowing down, the Federal Reserve might lower rates. Gold has gotten more expensive by over 17% since mid-February, which has surprised some people. Even though many thought interest rates would be cut three times, now it looks like it might only happen twice,” Neha Qureshi, Senior Technical & Derivative Analyst at Anand Rathi Commodities & Currencies said.
Qureshi said that the reasons for gold’s price increase include tensions in the Middle East and Ukraine and countries like China buying more gold.
On the Daily chart, MCX April Gold contract has surpassed its rising channel pattern and showing a pattern of ascending highs and lows which indicates an upward momentum, Qureshi said as she warns against the likelihood of pull back in prices amid RSI hitting the overbought zone. The Anand Rathi analyst places resistance at Rs 71,300 – Rs 71,800 while support at Rs 70,400- Rs 69,900.
Intraday trading strategy by Neha Qureshi
– Buy MCX June gold futures at Rs 70,900 with a stop loss of Rs 70,500 and a price target of Rs 71,300.
– Buy MCX May silver futures at Rs 81,900 with a stop loss of Rs 80,900 and a price target of Rs 83,900.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)