Gold prices fell for the sixth straight day to Rs 46,971 per 10 gram on April 29 on appreciation in rupee for the fourth day and rise in Treasury yields. The precious metal fluctuated on dovish FED outlook. The Fed said it was in no hurry in curbing emergency support.
The bullion metal extended losses after a gap-up start in the evening session, tracking subdued global cues.
Gold has declined Rs 1,464 or 3.02 percent from the high of Rs 48,429 it touched on April 21.
The yellow metal has been trading higher than 20 and 50 days’ moving averages but lower than the 5, 100 and 200 days’ moving average on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 54.22, which indicates sideways movement in prices.
According to Navneet Damani, Vice President, Motilal Oswal, “Gold prices rose after a brief consolidation witnessed in the previous session, bolstered by the US Federal Reserve's pledge to maintain easy monetary policy to aid economic recovery, while a weaker dollar provided further support. The Federal Reserve held interest rates and its bond-buying program steady on Wednesday after its two-day policy meet despite taking a rosier view of the US economic recovery. Governor Powell did not mention anything regarding the yields although he continued to underplay the rising inflationary expectation.”
On other hand, US President Joe Biden plans to unveil a sweeping $1.8 trillion package for families and education in his first speech to Congress, supporting the overall sentiment. Market participants will keep an eye on the US Q1 GDP data and weekly jobless claims scheduled later in the day, which could trigger further volatility in the market, he said.
The broader range on COMEX could be between $1775- $1798 and on the domestic front, prices could hover in the range of Rs 47,000- Rs 47,550.
“COMEX gold trades flat near $1775/oz. The early gains have erased amid recovery in US dollar Index and the US 10-year bond yields. Gold had edged in the early session up as the US dollar index slumped to a 1-month low on the back of Fed’s decision to maintain its accommodative stance despite improving outlook for the US economy. However, supporting gold in hopes of additional stimulus measures by the Biden administration. Gold may remain choppy reflecting trend in US dollar as market players counter Fed's dovish stance against improving economic outlook”, Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, was unchanged for the seventh day at 1,021.7 tonnes.
The US dollar index traded marginally lower at 90.56, down 0.04 percent in the evening trade against the major cross. The dollar index slumped to a one-month low as Fed maintained a dovish stance.
Spot gold eased by $4.77 to $1,776.82 an ounce at 11:49 GMT in London trading.
The spot gold/silver ratio currently stands at 67.40 to 1 indicating that silver has outperformed gold.
MCX Bulldesk traded slightly higher, up 10 points or 0.07 percent, at 14,732 at 17:13 hours. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
In the futures market, the gold rate touched an intraday high of Rs 47,299 and an intraday low of Rs 46,860 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 44,108 and a high of Rs 51,924.
Gold futures for June delivery slipped Rs 143, or 0.30 percent, to Rs 46,950 per 10 gram in evening trade on a business turnover of 10,899 lots. The same for August dipped by Rs 122, or 0.26 percent, to Rs 47,270 on a business turnover of 3,264 lots.
The value of June and August’s contracts traded so far is Rs 2,023.05 crore and Rs 76.18 crore, respectively.
Similarly, Gold Mini contract for May slipped Rs 87, or 0.19 percent at Rs 46,610 on a business turnover of 7,202 lots.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
We expect gold prices to trade sideways to higher for the day with COMEX gold support at $1,760 and resistance at $1,790 per ounce. MCX Gold June support lies at Rs 46,700 and resistance is seen at Rs 47,300 per 10 gram.
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