India Gold August futures fell on June 15 despite the positive trend seen in the international spot prices. Experts are of the view that as long as yellow metal holds above Rs 47,000 per 10 gm, strength is likely to continue but may face resistance near Rs 47,500.
On the Multi-Commodity Exchange (MCX), June gold contracts were trading lower by 0.35 percent at Rs 47,169 per 10 gram at 1000 hours. July futures for silver were trading 0.6 percent lower at Rs 47,377 per kg.
Gold prices rebounded last week in the international market amid fear of a second wave of coronavirus while silver settled almost flat.
Gold prices settled around $1,737 per troy ounce, with a gain of around 2.70 percent and silver was at $17.58 per troy ounce without any change.
At MCX, gold gained around 2 percent during the week and settled at 47,334 and silver at 47,690.
“The fear of the second wave of coronavirus and sell-off in global equities support safe-haven demand in both the precious metals. Global financial markets showed extreme volatility last week. We expect both the precious metals to remain volatile this week and continue to get support at lower levels,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart Pvt Ltd told Moneycontrol.
“If prices sustain above $1,745 per troy ounce /INR 47,550, the rally could extend towards $1,755/1,762 per troy ounce /INR 47,800-48,000 levels. Buy-on-dip strategy will work in both the precious metals,” he said.
Trading Strategy
Expert: Sriram Iyer, Senior Research Analyst at Reliance Securities
Technically, LBMA gold spot has given a breakdown below $1,735 levels where the upside momentum is slowing for the time to give some mild consolidation in the range of $1718-$1734 in the coming sessions.
On the MCX, the August gold contract is sustaining well above 47,000 levels, indicating some strength will continue while 47,500 still holds a strong resistance. Prices could trade in a range of 46900-47450.
Technically, LBMA silver spot is closer to the lower band support of Rising Channel formation, where below $17.30 levels prices can break down to $17.08-$16.80. Resistance holds at $17.70.
The MCX silver July contract has formed a Spinning Top Candlestick pattern, indicating a bearish reversal in the counter. A breakdown below 47,000 levels will take the price to 44,900, where 48,300 holds a resistance.
Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities
Comex gold recovered more than 3 percent in the previous week after falling below $1,680 amid strong US jobs data. Gold is back as a safe haven amid fears of the second wave of the coronavirus.
Equity markets have retreated from higher levels, pushing investors to the safety of the yellow metal. Gold is expected to see continued safe-haven demand after Fed’s cautious outlook on the economy and the rising fears of a second wave.
The $1,750-mark will be an important resistance for the bulls to penetrate if they want to take it higher to the next solid resistance zone of $1,770.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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