India Gold MCX August Futures trade comfortably above 50,100 levels on July 23 after hitting a fresh record high above 50,200 in the previous session tracking positive trend seen in the international Gold prices.
Gold rose to its highest in nearly nine years on July 23 driven by an escalation in U.S.-China tensions, while the expectation of more stimulus measures lifted the metal's appeal as an inflation-hedge, said a Reuters report.
Spot gold trades at $1,872.75 per ounce, after hitting its highest since September 2011 at $1,876.16 in early Asian trade, it added.
On the Multi-Commodity Exchange (MCX), August gold contracts were trading higher by 0.14 percent at Rs 50,150 per 10 gram at 0920 hours. September futures for silver were trading 6.5 percent higher at Rs 61,115 per kg.
Gold and silver skyrockets on Wednesday as the yellow metal gained around 2 percent while Silver rallied by more than 9 percent. Gold settled at $1865.10 per troy ounce and silver settled at $23.15 per troy ounce.
At MCX, gold breached 50000 mark for the first time in the history of the Indian commodity market and settled above 50100 levels. Silver test 62200 in intraday session and settled above 61000 levels.
“Due to escalating tensions between US and China, weakness in the dollar index, lower 10 years bond yields in the U.S., fear of slower recovery of the global economy from the pandemic and fresh stimulus support both the precious metals. Geo-political tensions are giving extra mile to both the precious metals,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“We expect both the precious metals remain firm and further upside is expected in today's session. If gold prices sustain above $1870 per troy ounce could extend the gains towards $1884-1900 per troy ounce, $1844 per troy ounce act as major support on a closing basis for gold,” he said.
Jain further added that at MCX, if gold prices sustain above 50200 then the rally could extend towards 50500-50770 levels. Support for the yellow metal is firmly placed at Rs 49880 on a closing basis.
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Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities
The United States ordered China to close its consulate in Houston, while Reuters reported that Beijing was considering shutting the U.S. consulate in Wuhan in retaliation. The escalating tensions between the U.S. and China is likely to further deteriorate the global economic outlook as it reels under the impact of the pandemic.
The US Dollar took a tumble against the basket of currencies on Wednesday and aided sentiments. International bullion prices have started marginally weaker this Thursday morning in Asian trade amid profit booking.
Technically, the MCX Gold August contract had a volatile session in the range of 49630-50199 levels where it gave a breakout of all-time high levels.
Moreover, it ended above 50100 levels indicating volatility to continue in coming sessions. Resistance holds at 50300-50550 level and Support is at 49600-49250 levels.
MCX Silver September made a high of 62200 levels where it has bounced back from 58000 levels and almost jumped more than 6% indicating positivity to continue.
Prices are likely to trade on high volatility with marginal upside momentum where it could trade in a range of 59200-62700 levels in the coming session.
Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities
COMEX gold hit a fresh 2011 high of $1874.9/oz but has retreated to trade near $1866/oz. Gold remains supported by weaker US dollar, strong ETF buying, increased US-China tensions, rising virus risks, and hopes of additional stimulus measures.
After the breakout earlier this week, gold has managed to hold above the $1850/oz and is likely to move towards the key $1900/oz level. Price may remain higher unless we see a significant recovery in the US dollar or some profit booking by ETF investors.
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