Gold futures rose in early trade on November 11 as mixed signals from US-China trade talks kept investors cautious, thus boosting demand for safe-haven buying.
Gold December futures were trading with a positive bias at Rs 37,690 per 10 gram at 0920 hours IST. It had closed 0.30 percent higher at Rs 37,687 on November 8.
For the week, Gold and Silver prices recorded their biggest weekly fall at least in the last three years. Spot Gold settled at $1,458 and Silver settled at $16.80 per troy ounce in the international market.
Experts are of the view that investors could use rallies in Gold to go short. Strong support is placed at 37,500 while resistance is placed at 3,8050. Investors could initiate long positions on a breakout above 38,050, they say.
Looking at the dramatic situation on the US-China trade deal and strength in dollar index both the precious metals remain volatile. Gold is expected to hold $1,450 and Silver is expected to hold $16.55 per troy ounce.
“Due to trade drama between US-china and strength in the dollar index, safe-haven buying eased in precious metals. After the Chinese commerce secretary comment last week as both the counties are agreed to roll back tariffs. Both the precious metals were crashed,” Manoj Kumar Jain, Director at IndiaNivesh Commodities told Moneycontrol.
“In the domestic market weaker rupee support prices of both the precious metals. Gold is having strong support at 37500 and resistance is placed at 38050. Silver is having strong support at 43500 and resistance at 44400. Either side breakout of the range will give further direction to the prices,” he said.
Trading Strategy:
Friday's session saw consolidation after a sharp fall in the previous session. However, the overall trend remains on downside.
Taking cues from the 60 min chart of Gold, prices are intact in a downward moving channel and is respecting the channel support. This sideways action has also relieved the oversold state of RSI and has created more room on the downside.
“Bollinger Bands have turned on the downside which suggests that trend is on the downside. On an international basis, till we do not see close above $1480 levels, it is better to adopt sell on rallies approach,” Pritam Kumar Patnaik, Head Commodities, Reliance Commodities told Moneycontrol.
“In short, the Gold trend is bearish with 37,900 as resistance and downside can be expected towards 37,450 levels. Investors could look at selling Gold Dec futures in the range of 37,750-37,800 with a stop loss of 37900, and a target of 37,450 levels,” he said.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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