Indian Gold April futures rose on March 2 tracking positive trends seen in the international Gold prices which rose more than 1 percent as worries that the coronavirus epidemic could push the global economy into recession sent investors scurrying for safe havens.
The rout in world stocks deepened, with investors rattled by weekend data from China that showed its fastest ever contraction in factory activity, raising fears of a global recession from the coronavirus.
China's manufacturers are struggling to find enough workers to fill factory floors as the regular post-Lunar New Year labour migration trickles rather than flows, slowing the restart of the economy amid the virus crisis, said the report.
On the Multi Commodity Exchange (MCX), April gold contracts were trading higher by Rs 280, or 0.70 percent, at Rs 41,677 per 10 gram at 09:20 hours.
Gold is likely to remain volatile as it is prone to profit-taking at higher levels. But, the trend is largely on the upside, and it should retest 42,000 which will act as a resistance.
It was the worst week for global financial markets since the 2008 financial crisis. Precious metals also hit hard last week due to coronavirus. Domestic gold prices crashed around 5.50 percent from the top and silver prices crashed more than 11 percent from the highs.
Trading strategy:
Expert: Manoj Jain, Director, IndiaNivesh Commodities
Prices in the international market also crashed as Gold hit a seven-year high at the start of the week but it was the biggest weekly decline since November. Gold prices slipped below $1,600 per troy ounce.
Due to fear of coronavirus and selloff in global financial markets precious metals are also crashed last week. After US Fed chairman hints for interest rates cut recovery is seen in global equities from their lows.
We expect precious metals to remain volatile this week and one dead cat bounce is expected. Gold is expected to trade in the range of 40,800-42,000. Silver is expected to be traded in the range of 43,700-45,500.
Expert: Jateen Trivedi, Senior Research Analyst (Commodity & Currency), LKP Securities
On the daily chart, the overall trend remains positive. RSI & MACD are signalling trend to be strong.
Some profit-booking can be expected at higher levels. For the day, 42,200-42,600 will act as resistance, whereas 42,000-41,750 will be supports.
Expert: Hareesh V, Head of Commodity, at Geojit Financial Services
Gold will remain positive due to increased safe-haven demand amid economic fears due to the virus outbreak in China, feeble global equities and a weak US dollar. Meanwhile, higher-level profit booking and concerns over physical demand from top consumer China and India likely to weigh down the sentiments.
Technical outlook: As long as $1,560 hold the downside, expect a continuation of the momentum towards $1,592 initially followed by $1,610 levels. However, an unexpected drop below $1,554 could weaken the sentiments.
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