Gold price today: Yellow metal slips; deploy buy on dips for a target above Rs 46,000

The Sensex rallied more than 1,000 points and the Nifty50 reclaimed 9,500 in the opening trade.

On the Multi Commodity Exchange (MCX), June gold contracts were trading lower by 0.20 percent at Rs 45,534 per 10 gram at 0920 hours. Silver futures were trading 0.4 percent lower at Rs 42,850 per kg.

Both the metals are likely to remain volatile on a strong rupee, seen in the previous trading session, and the stimulus package announced by the government, experts say.

But, reports of a second wave of coronavirus infections in some countries are likely to boost safe-haven appetite.

Chinese health authorities on May 12 called for vigilance to be maintained against the virus as new clusters emerge, even though the peak of the epidemic has passed, a Reuters report said.

Correction in the US dollar index, fall in the US CPI and Core CPI numbers and increase in the US budget deficit supported both gold and silver at the Comex division on May 12.

Gold future settled above $1,700 per troy ounce and silver also settled above $15.70 per troy ounce.

On the domestic front, investors could adopt a buy-on-dips strategy and the near-term target is seen above Rs 46,000 per 10 gm.

“Due to weakness in the rupee, both the precious metals settled on a weaker note in the domestic market. PM announced a 20 lakh crore relief package, which is 10% of the domestic GDP, to kick start the economy which is struggling due to lockdown from the last 50 days. The rupee appreciated around 1 percent against the US dollar and pushed both the precious metals lower,” Manoj Jain, Director (Head - Commodity & Currency Research) at Prithvi Finmart Pvt Ltd told Moneycontrol.

“We expect due to volatility in global financial markets, both the precious metals will remain volatile and are expected to hold key support of $1,692 per troy ounce for gold and $15.40 per troy ounce for silver in the Comex division,” he said.

On MCX, gold is expected to hold crucial support of Rs 45,330 and silver Rs 42,500, he said. Investors can deploy buy-on-dips strategy as gold is likely to sustain above Rs 45,800 and can extend the rally towards Rs 46,060.

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Expert: Sriram Iyer, Senior Research Analyst, Reliance Securities

International bullion prices started flat to higher on May 13 in Asian trade, supported by a safe-haven appeal for the metals amid concerns of new COVID-19 infections in economies opening up or easing restrictions too quickly.

Technically, LBMA gold spot is trading in a symmetrical triangle pattern, where $1,690 level is a lower band and $1,720 the upper band. A breakdown below $1,690 with good volume activity is awaited. The metal could trade in the $1,690-$1,712 range.

On the daily chart, MCX gold prices for June are intact in Falling Channel formation, where the 46,100 level holds resistance and a breakdown below 45,400 will take prices to 44700.

Expert: Ravindra Rao, VP-Head Commodity Research, Kotak Securities

Comex gold trades marginally higher near $1,705 per oz supported by concerns about the second wave of infections, weaker economic data and US-China tensions.

SDPR ETF holdings have also risen to 2013 highs. Gold continues to trade near $1,700 and this may continue unless there is more clarity on the virus situation or US-China tensions.

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