India’s gold prices for April delivery slipped on February 19 as worries about the coronavirus epidemic eased after a decline in the number of new cases. The yellow metal has still some more upside and traders can deploy a buy on dips strategy, experts say.
A day earlier, investors booked profits after gold and silver rebounded and breached crucial resistance in the international market.
Gold crossed $1,600 per troy ounce and silver $18 per troy ounce. At the Multi Commodity Exchange (MCX), gold crossed Rs 41,400 and silver Rs 47,200.
The April gold contracts had fallen 0.09 percent, or Rs 37, to Rs 41,383 per 10 gram on the MCX at 0920 hours.
Trading Strategy:
Manoj Jain, Director, India Nivesh Commodities
Despite strength in the dollar index and upbeat US Empire State manufacturing index, both the precious metals gained. Coronavirus outbreak and weakness in global equities support precious metals.
We expect both the precious metals to remain firm and buy on dip strategy will still work. Gold can buy around 41,200 with a stop loss of 40,950 for a target of 41,600 and silver can be bought at around 47,000 with a stop loss of 46700 for the target of 47,550.
Expert: Jateen Trivedi, Senior Research Analyst (Commodity & Currency), LKP Securities
On the daily chart, gold traded positive on February 18 and broke through the $1,600 ceiling after a revenue warning from Apple saw funds flee from risk into safe havens.
The $1,600 milestone achieved by both bullion and futures of gold capped six weeks of attempts by gold bugs to return to the perch which was last hit when US-Iran tensions spiked.
Overall, the trend remains positive. RSI & MACD are signalling volatility. For the day, Rs 41,550-Rs 41,675 will act as resistance, whereas Rs 41,275-Rs 41,125 as supports.
Expert: Hareesh V Head Commodity's gold outlook for your reference.
Easing fears on the spread of coronavirus and related economic fallout likely to put a cap for gold’s safe-haven demand. Stable global equities, limited physical market activities and an above four-month high US dollar also put downside pressure on prices. Anyhow, enduring global economic and political uncertainties likely to limit major downside.
Technical outlook: Immediate resistance of $1,610 needs to be cleared for the continuation of further rallies for the day. Else, may see corrective selling pressure. However, it is required to close below $1,545 to negate the broad bullish expectation.
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