Indian Gold February futures plunged nearly 1 percent as traders booked profits after data showed Chinese manufacturing activity held steady in January, but concerns over the coronavirus supported safe-haven buying.
On the MCX, gold contracts for February were trading lower by Rs 369, or 0.90 percent, at Rs 40,606 per 10 gram at 09:20 hours.
Gold prices gained by about 1 percent on Thursday and silver prices gained around 3 percent in the domestic market amid Coronavirus outbreak.
The World Health Organization declared on Thursday that the coronavirus epidemic in China now constitutes a public health emergency of international concern, said a Reuters report.
International Gold tested the resistance levels of $1584 per troy ounce and silver also test $17.80 per troy ounce. At MCX, Gold prices made a high of 41068 and silver made a high of 46966.
Experts see some profit-taking at higher levels, but weak rupee, and fears of Coronavirus outbreak into other countries will lend support. The metal could get support near 40,500 levels.
“We expect some profit-taking in both the precious metals at higher levels in early trading session today. Gold could test $1580-78 and silver could test $17.70-17.60 levels again,” Manoj Jain, Director & Head of Commodities, IndiaNivesh Securities told Moneycontrol.
“Ahead of Union Budget on Saturday and coronavirus outbreak would keep prices volatile,” he said.
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Expert: Jateen Trivedi, Sr Research Analyst - Commodity & Currency, LKP Securities Ltd
On the daily chart, Gold prices inched lower in the morning trade after surveys showed Chinese manufacturing activity held steady in January and services firmed, although concerns over the coronavirus and its economic impact kept the metal on track for a second monthly gain.
20,50,100EMA are signaling positive range bound movement ahead. But, the zone of 41100-40900 clearly is a major resistance zone which will likely act as strong selling point. RSI & MACD are signaling basing.
For the day 40800-41050 will act as resistance whereas 40500-40700 as supports.
Hareesh V, Head Commodity Research at Geojit Financial Services
Fears about the economic impact of the virus outbreak in China remain supporting gold’ safe haven demand. Concerns over the performance of equities and a slightly weak U.S dollar may also send investors to safe assets like gold. However, higher level profit booking cannot be ruled out as prices are hovering near its multi month highs.
Technical outlook: while prices stay above $1560 expect to continue the momentum towards $1592 initially followed by $1610 levels. However, an unexpected drop below $1554 could weaken the sentiments.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.