Gold was trading higher in Indian markets on March 30 despite a muted trend in international spot prices but silver was trading lower, below Rs 64000 a kg.
On the Multi-Commodity Exchange (MCX), April gold contracts were trading higher by 0.36 percent at Rs 43,700 for 10 grams at 0950 hours. May silver futures were trading 0.41 percent up at Rs 65,240 a kilogram.
Experts say the yellow metal could remain volatile amid strength in the dollar index and a rise in the US bond yields could weigh on the precious metal. Traders can use the rise to go short for a target of 43,400 per 10 gm.
“International gold trades weaker, weighed down by a sharp rise in US bond yields and firmness in US dollar amid increasing optimism about US economy. Also weighing on price is the progress on vaccine front and recovery in Chinese equities and weaker investor interest,” Ravindra Rao, VP- Head Commodity Research at Kotak Securities said.
“However, supporting price is rising virus cases and loose monetary policy stance of major central banks. Gold may remain under pressure amid stronger US dollar, however, a drop below $1,700/oz seems less likely amid worsening virus situation,” he said.
On March 29, gold and silver plunged again amid strength in the dollar index. Both the precious metals settled on a weaker note in the international markets.
Gold June futures contract settled at $1714.60 a troy ounce and May silver contract settled at $24.77 a troy ounce. Both precious metals also settled on a weaker note in the domestic markets on March 29.
Gold gained on reports that a large investment fund, Archegos Capital Management, late last week quickly dumped $30 billion in holdings, including big positions in Viacom CBS and Discovery, possibly because the firm was over-leveraged and got margin calls.
The dollar index gained again and traded at four and a half months highs and inched closer towards the 93-mark, pushing the yellow metal lower. Strength in the dollar index triggered selling in both the precious metals.
“Further strength in the dollar index could push gold prices below $1,700 per troy ounce this week. We expect both the precious metals to remain volatile this week and continue to trade with a negative bias,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“Gold is having support at $1,700-1,688 per troy ounce and resistance at $1,728-1,744 per troy ounce. Silver is having support at $24.44-24.00 per troy ounce and resistance at $25.00-25.40 per troy ounce,” he said.
On MCX, gold has support at Rs 44,440-44,300 and resistance at Rs 44,880-45,050, he said. Silver has support at Rs 63,800-63,400 and resistance at Rs 64,700-65,100 levels. "We suggest selling in the gold on a rise around Rs 44,880 with a stop loss of Rs 45,050 for the target of Rs 43,400," Jain said.
Track LIVE Gold prices here
Trading Strategy:Sriram Iyer, Senior Research Analyst at Reliance Securities
International spot gold and silver tumbled on March 29 as a firm dollar and rising US treasury yields dented the safe-haven metal's appeal.
Domestic gold and silver ended weaker on Monday, tracking weak overseas markets. Prices were also under pressure amid bets for a swift economic recovery in the United States.
All eyes will be on President Joe Biden who will this week release details of the infrastructure spending package that could be between $3 and $4 trillion.
Domestic gold and silver prices could trade flat to marginally lower on March 30 morning, tracking overseas prices.
Technically, MCX June gold has given a breakdown below 45,000, indicating that negative trend will continue up to Rs 44,500-44,200 levels. Resistance is at Rs 44,850-45,000 levels.
Technically, MCX May silver is holding support near Rs 64,000-Rs 63,700 levels and resistance is at Rs 64,600-65,300 levels it could trade within these ranges in the coming session.
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.