Gold prices edged higher on April 29 in the international markets as lower US Treasury yields outweighed pressure from an elevated dollar, but bullion was still headed for its biggest monthly drop since September on fears of aggressive interest rate hikes by the Federal Reserve.
At 9.27 am, gold contracts were up 0.56 percent at Rs 51,551 for 10 grams on the Multi-Commodity Exchange (MCX) while silver added 0.44 percent to Rs 64,200 a kilogram.
Precious metals gained ground as weak US data indicates a slowdown in the US economy. US GDP data, released yesterday, stood at -1.4 percent while forecasted at 1.1 percent. The International Monetary Fund (IMF) has downgraded the global economic growth, which ramps up the expectation as US economic data have started indicating a slowdown in the economy that may support precious metals at lower levels.
Technically, selling momentum is getting weaker in precious metals that may support gold and silver prices. However, a strong US dollar and bond yield may cape the gain. Today prices may remain range-bound ahead of Fed's policy meeting, scheduled next week, said Nirpendra Yadav, Senior Commodity Research Analyst at Swastika Investmart.
Trading Strategy
Ravi Singh - Vice President and Head of Research - ShareIndia
Gold prices are in correction mode as the US dollar index surged on the expectation of an aggressive monetary policy tightening by the US Fed in the upcoming meeting. The outcome of the meeting may decide the next trigger for gold prices. Gold has an immediate support near Rs 50,800 levels.
Buy zone near Rs 51,100 for target of Rs 51,400
Sell zone below Rs 50,900 for target of Rs 50,600
Rahul Kalantri, VP Commodities, Mehta Equities
Gold and silver prices on Thursday settled on a mixed note in the international as well as domestic markets. Gold prices closed slightly positive, up by 0.14 percent while silver closed negative, down by 1.19 percent. The gold and silver bulls were trying to stop the recent price downtrend that pushed prices to nine-week lows overnight. A strong US dollar and rising bond yields have been hammering the two metals recently.
The US GDP report showed a surprisingly weak reading of -1.4 percent. That was worse than expectations for a rise of 1.0 percent. The gold market saw a mild rally in the aftermath of that report, but gains could not be held.
The Japanese yen hit a 20-year low against the US dollar as the Bank of Japan has reinforced its commitment to low interest rates despite rising Inflation. Meanwhile, the Euro currency fell to a five-year low against the dollar as soaring energy prices crimp the Euro zone economy. The US dollar index is solidly up again today and hit another two-year high.
Manoj Kumar Jain, Prithvi Finmart Commodity Research
Gold and silver prices on April 28 settled on a mixed note in the international markets. Gold June futures contract settled at $1,891.30 per troy ounce, up by 0.14 percent and silver May futures contract settled at $23.18 per troy ounce, down by 1.19 percent. Domestic markets also settled on a mixed note. We expect gold and silver prices to remain volatile in today’s session. Gold could hold $1,884 per troy ounce and silver could hold $23 per troy ounce levels on a closing basis. The yellow metal has support at $1,884-1,872, while resistance at $1,900-1,912 per troy ounce. Silver has support at $23.00-22.70, while resistance is at $23.55-23.80 per troy ounce.
At MCX, gold has support at Rs 51,050-50,800 and resistance at Rs 51,440-51,660 while silver has support at Rs 63,660-63,200 and resistance at Rs 64,220-64,750. We suggest buying gold on dips around Rs 51,050 with a stop loss of Rs 50,800 on a closing basis for target of Rs 51,550 and silver around Rs 63,660 with a stop loss of Rs 63,200 on a closing basis for target of Rs 64,750.
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