India Gold MCX April futures contract price is inching higher on March 18 following the positive trend in the international spot prices after the US Fed kept the interest rate unchanged and assured markets on the stance to keep benchmark rates near-zero through at least 2023.
On the Multi-Commodity Exchange (MCX), April gold contracts were trading higher by 0.74 percent at Rs 45,170 for 10 grams at 0920 hours. May silver futures, too, were trading 1.1 percent higher at Rs 67,999 a kilogram.
Gold and silver traded steady ahead of the U.S. Federal Reserve meeting outcome on Wednesday. Both the precious metals settled on a mixed note in the international markets.
Gold April futures contract settled at $1727.20 per troy ounce, and Silver May futures contract settled at $26.06 per troy ounce. Both precious metals settled on a slightly positive note in the domestic markets in the previous trading session.
Gold and silver traded steady despite gains in the 10-year bond yields. The 10-year U.S. bond yields reached 13 months high on Wednesday and test 1.67% restricted gains in the precious metals, data from Prithvi Finmart showed.
“The U.S. Federal Reserve accommodative stance on monetary policy and inflation concerns could support precious metal prices in the short term. Gold and silver could show some strength in Thursday’s session,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“Gold has support at $1714-1700 per troy ounce and resistance at $1744-1758 per troy ounce. At MCX, Gold has support at 44660-44440 and resistance at 45055-45250,” he said.
Jain further added that Silver has support at 66600-66100 and resistance at 67800-68500 levels. We suggest buying in the gold around 44800 with a stop loss at 44550 on a closing basis for the target of 45200.
Trading strategy
Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold prices rose on Wednesday after the US Federal Reserve reiterated its accommodative monetary policy, which also weakened the dollar.
Silver prices, too, ended with gains on Wednesday. Domestic gold and silver prices ended flat on Wednesday ahead of the outcome of the US FOMC meet.
The Federal Reserve on Wednesday repeated its pledge to keep the benchmark overnight interest rate near-zero for at least till 2023.Domestic gold and silver could likely to open with a gap trade tracking the firm overseas prices this Thursday morning.
Technically, MCX Gold April could give a positive breakout above 45000 which could push prices up to 45500-45700 levels. Support is at 44800-44550 levels.
MCX Silver May could witness a breakout above 67800-67930 level could see a bullish momentum up to 68400-69500 levels. Support is at 66800-66200 levels.
Ravindra Rao, VP- Head Commodity Research, Kotak Securities
COMEX gold trades over 1% higher near $1,750/oz after a 0.2% decline on March 17. Gold trades higher amid correction in the US dollar index and bond yields on the back of Fed decision.
The US Fed kept monetary policy unchanged as expected but played down risks from rising yields and indicated that interest may remain low until 2023. However, weighing on price is Fed’s upbeat growth projection and continuing ETF outflows.
Gold has rescaled $1750/oz indicating that the upward momentum is extending however some caution is required as US bond yields still remain at elevated levels while ETF outflows continue.
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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