Experts are of the view that as long as MCX gold holds above 46500, the bulls can push the rally towards 46,800 per 10 gm.
Gold prices rose in India on May 22, tracking positive trend in international prices. On MCX, June gold contracts were trading higher by 0.4 percent at Rs 46,590 per 10 gram at 0920 hours. Silver futures were trading 0.24 percent lower at Rs 47,220 per kg.
US-China frictions dampened risk appetite, underpinning bullion and offsetting pressure on the metal’s prices from the slightly better data, said a Reuters report.
Asian shares fell after Beijing’s plan to impose new national security legislation on Hong Kong drew a warning from US President Donald Trump, it said.
Experts are of the view that as long as MCX gold holds above 46,500, the bulls could fuel the rally towards 46,800 levels per 10 gm.
Gold and silver prices crashed on May 21 after better-than-expected US economic data and gains in the dollar index.
On MCX, gold prices slipped around 2 percent and settled below Rs 46,500 while Silver declined more than 3 percent to stay below 47,400.
“Improved US manufacturing and services PMI data and less than expected jobless claims triggered profit-taking in both the precious metals. Strength in dollar index also pushed both the precious metals lower,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart Pvt Ltd, told Moneycontrol.
“But, fear of the second wave of coronavirus and tension between US and China after US senate approved a bill to delist 800 Chinese companies from US stock exchanges could support prices of both the precious metals at lower levels,” he said.
As long as gold prices sustain above $1,722 per troy ounce (Rs 46500), the rally could extend towards $1733-1745 per troy ounce (Rs 46,650-46,800) levels again.
Expert: Sriram Iyer, Senior Research Analyst, Reliance Securities
The downside could remain though amid rising tensions between the US and China and the US economic data is likely to become grimmer as the effects of the pandemic become clearer. It is difficult to know what the recovery could look like in the coming months.LBMA gold spot could trade in the $1,720-1,750 range for the session. MCX June gold contract could trade in the Rs 46,000-46,885 range for the day.
Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities
Comex gold was trading moderately higher near $1,725/oz after a 1.7 percent decline on May 21. Increased US-China tensions, monetary easing measures by central banks and weak economic outlook supported prices.
However, investor buying has slowed down while equity markets are relatively stable. Gold’s rally is showing signs of exhaustion amid relative calm in equity markets. However, buying interest may emerge at lower levels amid global growth worries and US-China tensions.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.