Gold prices rose in Indian markets on January 21 on positive global spot prices. On the Multi-Commodity Exchange (MCX), February gold contracts were trading higher by 0.30 percent at Rs 49,685 for 10 grams at 0920 hours. March silver was trading 0.70 percent higher at Rs 67,456 a kilogram.
Experts said gold is supported by weakness in the US dollar, hopes of increased US stimulus as Joe Biden takes charge as well as a rise in virus cases. It makes sense to buy the dip for a target of Rs 50,000 per 10 gm, they said.
Gold and silver show extreme volatility on the inauguration of US President Joe Biden but both metals extended gains and settled on a positive note.
Gold February futures contract settled at $1,866.50 per troy ounce and March silver at $25.77 per troy ounce. Both metals settled on a positive note in the domestic markets.
Gold prices hit nearly a two-week high on January 20 on anticipated stimulus plans from the Biden administration and the dollar index slipped for the third day in a row, supporting safe-haven buying in the metals, experts said.
“Inflow into gold and silver also came from funds exiting bitcoin as the cryptocurrency space shuddered again at the thought of regulation — something Biden’s Treasury Secretary pick, Janet Yellen, invoked during the Senate hearing held on January 19 to confirm her nomination,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“We expect both the precious metals to remain volatile and continue to get support at lower levels. At MCX, gold has support at 49,300-49,055 and resistance at 49,800-50,000 levels; silver has support at 66,300-65,800 and resistance at 67,500-68,200 levels,” he said.
Jain suggests buying in the gold on dips around 49,200 with the stop loss of 48,800 for the target of 50,000 and in the silver around 66,300 with the stop loss of 65,500 for the target of 68,500.
Trading Strategy
Sriram Iyer, Senior Research Analyst at Reliance Securities
International spot gold and silver prices rose on January 20 on expectations that Biden's administration would increase stimulus measures to deal with the economic fallout of the coronavirus pandemic.
Domestic gold and silver ended higher, tracking overseas prices. The dollar extended losses and lifted sentiment.
Investors now will be focused on whether the $1.9-trillion stimulus package proposal will get any resistance in the Senate and the pace of COVID-19 vaccine distribution.
Domestic bullion could start flat on January 21, tracking international prices.
Technically, MCX February gold has given a breakout above 49,500 and could see a bullish momentum up to 49,850-50,160 levels. However, below 49,300, it will continue its sideways momentum where support is at 49080-48900 levels.
MCX March silver had a volatile session, where it bounced back from 65,500 and traded above 67,000. Therefore, it can continue its bullish momentum up to 67,600-68,300 levels. Support is at 66,600-65,900 levels.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities
Comex gold was trading marginally higher near $1,869/oz after gaining 1.4 percent the previous day. Gold is supported by weakness in the dollar, increased US stimulus expectations, rising virus cases and growing US-China tensions.
However, weighing on the price is the vaccine progress and weaker investor interest as is evident from ETF flows. Gold's break past $1,860 may lead to extended gains but the momentum may sustain only if there is progress on US stimulus talks.
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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