India Gold April futures rose sharply on March 18 tracking gains in international spot prices after the US Federal Reserve outlined measures to boost liquidity in the market easing some concerns over disruptions to the global economy.
The Fed said on Tuesday it would reinstate a funding facility used during the 2008 financial crisis to get credit directly to businesses and households as fears over a liquidity crunch due to the virus have grown in recent days, said a Reuters report.
Spot gold rose towards $1,538.63 per ounce earlier in trade today. The US gold futures was trading around $1,538 an ounce.
Experts feel that the volatility is likely to continue, but we could see the yellow metal heading towards 41,000 while 39,500 is likely to act as crucial support.
Gold and silver prices show a mixed trend on Tuesday after U.S. President Donald Trump's fear of economic recession and lowering of Chinese GDP. The Gold-silver ratio has also reached record levels.
Morgan Stanley and S&P Global have already warned of the coronavirus outbreak which could result in a global recession.
“Global equities are highly volatile and unstable. We expect global equities remain volatile and could also impact both the precious metals,” Manoj Jain, Director, IndiaNivesh Commodities, told Moneycontrol.
“Gold is expected to be traded in the range of $1,500-1,560 and silver prices are expected to be traded in the range of $12.22-13.30 per troy ounce,” he said.
Jain further added that MCX Gold prices are expected to be traded in the range of 39,500-41,330 and silver prices are expected to be traded in the range of 34,500-37,200 range.
Trading strategy:
Expert: Jateen Trivedi, Senior Research Analyst (Commodity & Currency), LKP Securities
On the daily chart, Gold traded positive on Tuesday. Gold prices rose on Wednesday morning trade as the US Federal Reserve's measures to boost liquidity in the market eased some concerns over disruptions to the global economy and a potential cash crunch due to the coronavirus outbreak.
Major moving average 20, 50, 100-Days EMA are suggesting profit booking can continue as the markets try to cover margin globally on the back of heavy weakness in the equity markets.
Overall the trend remains positive till the time 39,500 holds on closing basis but selling will be seen at higher levels. For the day, 40,550-41,225 will act as resistance whereas 40,250-39,750 as supports.
Expert: Hareesh V, Head of Commodity, at Geojit Financial Services
Aggressive economic boosting measures taken by global central banks to protect from possible economic fallout due to coronavirus outbreak will continue to lift the demand for gold.
Increased anxiety about risky assets prompted investors to seek shelter in safe-haven assets like precious metals. Meanwhile, a steady dollar and moderate physical activities are likely to limit major gains.
Technical Outlook:
Expect a choppy trade inside $1545-1465 levels initially and breaking any of the sides would suggest a fresh direction to the commodity.
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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