India Gold June Futures rose on May 19 tracking positive trend in the international spot prices supported by strained Sino-US relations and a dismal global economic outlook.
Positive news from an early-stage trial for a coronavirus vaccine spurred some risk appetite and capped the yellow metal's gains. On Monday, Gold future tested the crucial resistance of $1,772 per troy ounce, and silver also breached $17.80 per troy ounce at Comex division.
“Gold has risen about 14% this year as central banks rolled out a wave of rate cuts and another stimulus to limit the economic damage from the pandemic. Lower interest rates reduce the opportunity cost of holding non-yielding bullion,” said a Reuters report.
On the Multi Commodity Exchange (MCX), June gold contracts were trading higher by 0.40 percent at Rs 46,840 per 10 gram at 09:20 hours. Silver futures were trading 0.10 percent higher at Rs 47,746 per kg.
Precious metals have come off from their respective highs, but experts feel that volatility is likely to remain and the next big resistance for India Gold is placed at Rs 47000.
“We expect very high volatility in today's session after news of a successful trial of COVID-19 vaccine. Gold is expected to hold crucial support of $1714 per troy ounce /46100 and it sustains above $1733 could test $1745-1755 per troy ounce levels again. At MCX, if it sustains above 46700 could test 46920-47000 levels again,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart Pvt Ltd told Moneycontrol.
“Silver is also having crucial support at $17 per troy ounce /INR 46800 and expected to be respected. If it sustains above $17.50 could test $17.80-18 per troy ounce again. At MCX, if it sustains above 47900 could test 48500-48800 levels again. We expect both side move in Tuesday's session,” he said.
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Expert: Sriram Iyer, Senior Research Analyst, Reliance Securities
International bullion gave up gains on Monday after touching 2011 highs as investors booked profits from the recent gains.
Optimism about a resumption in economic activity and news of positive results on a potential coronavirus vaccine also weighed on prices.
Prices have started with gains on Tuesday as additional stimulus hopes from Eurozone and rising tensions between U.S. and China. LBMA GOLD Spot could trade in a range of $1725-1760 for the session.
MCX Gold June contract close gave up all the gains made on Friday and closed below Friday’s low. Support now is at 46450-46400 levels. 47000-47100 levels should hold resistance for the session.Disclaimer
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