India Gold June futures fell on May 8 tracking muted trend seen in international spot prices, but experts feel that the yellow metal is still a buy on dips for a target of 46600 per 10 gm.
On the Multi Commodity Exchange (MCX), June gold contracts were trading lower by 0.30 percent at Rs 46,024 per 10 gram at 10:00 hours. Silver futures were trading 0.06 percent higher at Rs 43,147 per kg.
International Gold was hovering near a two-week high hit in the previous session as investors awaited the U.S. jobs report to gauge the health of the economy after grim economic indicators raised the prospects of more rate cuts by the Federal Reserve, said a Reuters report.
Lower interest rates would further weigh on bond yields and boost demand for non-yielding bullion, which hit a near two-week peak in the last session, it said. Spot gold was steady at $1,715.23 per ounce, having hit its highest since April 27 at $1,721.76 in the previous session.
Gold and silver prices rallied 2 percent on Thursday while Silver gained around 3 percent in the domestic market. At Comex division, Gold future tested the crucial resistance of $1724 per troy ounce while silver test $15.60 per troy ounce.
After downbeat US unemployment claims, data, and weakness in dollar index both the precious metals showed strength. Bullion also took clues from investor sentiment about negative Fed rates in the coming months. However, the US Federal Reserve denied negative interest rates.
“Easing lockdown restrictions support US equities and Dow Jones index crossed 24000 levels, Chinese export data are also better than expectations. But due to pandemic global investor’s rushed for safe-haven buying in both the precious metals,” Manoj Jain, an independent market expert told Moneycontrol.
“At MCX, Gold is having support at 45920 and immediate resistance at 46330, if it sustains above 46330 could extend the rally towards 46600 levels again,” he said.
Trading Strategy:
Expert: Sriram Iyer, Senior Research Analyst from Reliance Securities
Bullion rose Thursday as weak unemployment in the United States, heightened fears over a coronavirus-induced global downturn.
Prices also found support as Bank of England in their monetary policy yesterday kept the door open for more stimulus next month.
International bullion prices have started higher this Friday morning in Asian trade as US dollars have started lower ahead of the non-farm payrolls due tonight.
MCX Gold June contract gave a breakout above 46000 levels with an increase in volume activity forming a Long Bullish Candlestick signifies the continuity of bullish trend. Therefore, 48800 will act as immediate resistance 46650 will act as resistance.
So the strategy for the session will be to Buy Gold June contract in the range of 46000-46020 with a stop loss at 45850, and a target at 46550.
Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
COMEX gold trades higher near $1730/oz after a sharp 2.2% gain yesterday. Gold rallied on correction in US dollar and disappointing US economic data.
Weighing on price is general strength in equity market amid reopening of economies, upbeat China's trade data and expectations of trade talks between US and China.
Gold has rebounded after taking support near $1680/oz and amid positioning ahead of US non-farm payrolls data today. The gains may extend only if the data is worse than market expectations.
Expert: Anuj Gupta , DVP–Commodities & Currencies Research, Angel Broking Ltd.
On Thursday Gold prices increased by almost 1.74% and closed above 46100 levels. In the international market, gold is also trading on a positive note.
This is due to weakness in the dollar due to dovish US economic data and expectation of negative interest rates in the next year in the US. Today, Gold may trade on a positive side. Traders can buy gold at 45900 levels with the stop loss of 45650, for the target of 46500 levels. In the international market, Gold may test $1730 levels.
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