India Gold June Futures slipped in early trade on May 27 tracking mixed trend seen in the international spot prices as concerns about the US response to China's proposed security law for Hong Kong countered optimism about a re-opening of the global economy.
US President Donald Trump said on Tuesday the United States was working on a strong response to China's planned national security legislation for Hong Kong and it would be announced before the end of the week, said a Reuters report.
On MCX, June gold contracts were trading lower by 0.4 percent at Rs 46,096 per 10 gram at 0920 hours. Silver futures were trading 0.7 percent higher at Rs 48,630 per kg.
Experts are of the view that investors can use dips to buy into yellow metal for a near-term target of Rs 46,550 per 10 gm. Strong support based on technical parameters is placed at Rs 46,200 per 10 gm.
Reopening economy, hope of coronavirus vaccine, and upbeat US consumer confidence and new home sales data triggered profit-taking in both the precious metals on Tuesday. Gold slipped around 1.5 percent and silver also slipped around 1 percent.
“Despite corrections in the dollar index and US-CHINA tensions both the precious metals unable to get support and settled on a weaker note,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart Pvt Ltd, told Moneycontrol.
“Hope of further stimulus package from Japan also pushed both the precious metals lower. We expect both the precious metals will get support at lower levels again. Gold future is expected to hold crucial support of $1692/INR 45920 and silver is also expected to hold $17.20/INR 47200 levels,” he said.
In terms of trading strategy, Jain recommends investors to buy Gold on dips. Gold could be buy around 46150 with a stop loss of 45920 for a target of 46550.
Trading Strategy
Expert: Sriram Iyer, Senior Research Analyst, Reliance Securities
Gold tumbled on Tuesday, while silver also ended with cuts on Tuesday as major economies further eased coronavirus-linked restrictions, fuelling hopes for economic recovery and bolstering risk appetite.
investors also grew optimistic about a potential coronavirus vaccine.
International bullion prices have started flat this Wednesday morning in Asian trade as optimism of re-opening of economies offset concerns from escalating tensions between U.S and China.
Technically, LBMA GOLD Spot has given a correction from $1765 levels & broke below $1717 levels in the last session indicating that it could continue its Bearish momentum. Below $1709 levels could take prices to $1698-$1680 levels where $1717 will hold immediate resistance.
Domestic bullion could start flat this Wednesday morning, tracking a flat start in the international markets.
Technically, the MCX Gold June contract has given a breakdown below 46400 levels in the last session where 46300 holds support. Any breakdown below 46200 will give a further downside fall of up to 46050 to 45600 levels.
Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
COMEX gold trades lower at $1702/oz after a 1.7% decline yesterday. Stability in the equity market and weaker consumer demand is weighing on the gold prices.
However, supporting price is US-China tensions, hopes additional stimulus measures, and mixed economic data from major economies and weakness in the US dollar.
Gold has corrected sharply from recent highs however we may see extended losses only if price breaks and sustains below $1700/oz level.
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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