Gold was trading lower in Indian markets on March 31 tracking muted trend in international spot prices. May silver, too, also fell by about 1 percent in the morning trade.
On the Multi-Commodity Exchange (MCX), June gold contracts were trading lower by 0.27 percent at Rs 44,304 for 10 grams at 0920 hours. May silver futures were trading 0.84 percent down at Rs 62,595 a kilogram.
Gold and silver extended fall on March 30 amid strength in the dollar index, rising 10-year bond yield in the United States and upbeat US CB consumer confidence data.
June gold futures contract settled at $1,686 a troy ounce with a loss of over 1 percent and May silver futures contract settled at $24.14 a troy ounce with a loss of more than 2 percent.
Despite weakness in the rupee, both precious metals also settled on a weaker note in the domestic markets. The dollar index rose and reached to fresh four-and-a-half-month high and crossed the 93-mark.
“Ahead of the US President Joe Biden's economic stimulus programme both the precious metals remain under pressure. President Biden is set to unveil on Wednesday the first of two expected portions of the next phase of his US economic agenda. That package would cost $3 trillion to $4 trillion,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“We expect both the precious metal to trade under pressure in Wednesday’s session. At MCX, gold is having support at 44,300-44,100 and resistance at 44,660-44,800, while silver has support at 62,800-62,500 and resistance at 63,600-64,000 levels,” he said.
Jain suggests selling in gold on rise around Rs 44,600 with a stop loss of Rs 44,800 for the targets of Rs 44,280.
Trading Strategy
Sriram Iyer, Senior Research Analyst at Reliance Securities
On March 30, international spot gold and silver crashed as a firmer dollar, higher treasury yields and hopes of a faster US economic recovery dampened the demand for bullion.
Domestic gold and silver ended weaker as well, tracking weak overseas markets.
Benchmark US 10-year Treasury yields rose to a 14-month peak, boosted by hopes of stronger growth and inflation ahead of Biden's infrastructure plan.
Domestic gold and silver prices could trade flat to lower on March 31, tracking overseas prices.
Technically, if MCX Gold June trades below Rs 44,500, we could see downside pressure up to Rs 44,000-43,700 levels. Resistance is at Rs 44,600-44,750 levels.
Technically, MCX May silver is below 200-DMA at Rs 63,845 which could pull prices down to Rs 62,700-62,300 levels.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
Comex gold traded about 0.4 percent lower near $1,680/oz after a 1.7 percent decline on March 30. Gold is pressurised by firmness in the US dollar and US bond yields, weaker ETF interest, upbeat Chinese economic data and general progress on the vaccine front.
Rising virus cases and Fed’s dovish stance failed to lend much support. Gold is likely to remain under pressure unless there is a sharp correction in US dollar or bond yields.
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