Gold edged lower on Friday in international markets but prices were still set for their first weekly gain since mid-April, as the dollar receding from two-decade highs and mounting concerns over US economic growth revived safe-haven demand. Spot gold was down 0.2 percent at $1,838.81 per ounce by 0258 GMT, tracking an uptick in the dollar on the day. US gold futures edged 0.1 percent lower to $1,839.30. Gold prices have climbed about 1.5 percent this week.
At 9:45am, gold contracts were marginally up 0.14 percent at Rs 50,615 for 10 gram on the Multi-Commodity Exchange (MCX) while silver shed 0.03 percent at Rs 61,547 a kilogram.
Precious metals prices gained as the US dollar index and benchmark Treasury yield fell more than one percent in the previous session. US spot power and natural gas prices soared near their higher levels over several parts of the country supporting the prices of precious metals. Selling pressure in the global equity market spurs safe haven demand and makes gold prices attractive for investors. In Comex, gold and silver gained around 1.30 percent while Brent crude oil prices rose nearly one percent yesterday. Buying momentum in precious metals may continue today. Gold has resistance at Rs 51000 and support at Rs 50300. Silver has resistance at Rs 62000 and support at Rs 61000, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices traded steady on Friday with spot gold prices at Comex trading near $1838 per ounce after rallying more than one percent in the previous session. Gold prices rebounded with dollar decline and fall in US bond yields. The dollar index fell below the 103 mark while 10 year US Treasury yields fell to 2.85 percent. Global economic growth worries are weighing on the dollar despite hawkish US Fed. Higher inflation may continue to support gold prices in medium term.
We expect gold prices to trade sideways to up for the day with Comex Spot gold support at $1820 and resistance at $1850 per ounce. MCX Gold June futures support lies at Rs 50200 and resistance at Rs 50800 per 10 gram.
Rahul Kalantri, VP Commodities, Mehta Equities
Gold and silver prices on May 19 logged significant gains, boosted by sharply falls in US dollar index and slight decline in US Treasury yields. Amid growing weakness in the US labour market, a more than expected number of American workers are applying for first-time unemployment benefits which also appears to be adding to gold’s technical bullish momentum.
We expect bullion prices to remain volatile in today’s session. Gold has support at $1822-1810, while resistance is at $1850-1862. Silver has support at $21.48-21.20 and resistance at $22.05-22.30. In rupee terms gold has support at Rs 50,330–50,110, while resistance is at Rs 50,740–50,950. Silver has support at Rs 61,140-60,750, while resistance is at Rs 61,950–62,410.
Manoj Kumar Jain of Prithvifinmart Commodity Research
Gold and silver jumped again amid downbeat US economic data and sell-off in the dollar index. Both precious metals settled on a positive note in international markets. We expect gold to test $1858 per troy ounce and silver could test $22.40 per troy ounce levels. Gold has support at $1830-1814 per troy ounce and resistance at $1858-1870 per troy ounce while silver has support at $21.55-21.00 and resistance at $22.10-22.40 per troy ounce.
At MCX, gold has support at Rs 50330-50100 and resistance at Rs 50750-50920 while silver has support at Rs 61100-60660 and resistance at Rs 61900-62500. We suggest buying gold on dips around Rs 50350 with a stop loss of Rs 50100 on a closing basis for target of Rs 50800 and silver on dips around Rs 61100 with a stop loss of Rs 60600 on a closing basis for target of Rs 62400.
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