India Gold April futures under pressure on February 26 despite positive trend seen in international spot prices, but experts feel that from a trading perspective, traders could use dips towards 42,000 per 10 gm to accumulate or add fresh positions in the yellow metal.
Gold prices rose on February 26, heading back towards a more-than seven-year high hit earlier this week, as a warning from the United States over the domestic spread of the coronavirus outbreak rattled global markets, supporting safe-haven demand, said a Reuters report.
Spot gold was trading at $1,643.49 per ounce, after having slumped as much as 1.9 percent in the previous session. On Monday, prices touched $1,688.66, their highest in more than seven years.
On the Multi Commodity Exchange, April gold contracts were trading lower by Rs 298, or 0.70 percent, at Rs 42,490 per 10 gram at 09:20 hours.
Gold and silver prices crashed on Tuesday after record gains. Gold prices plunged more than 3 percent while silver hit a 4 percent lower circuit.
The selloff in global equities triggered profit-taking in precious metals. Gold breached crucial support of $1640 per troy ounce and silver also breached crucial support of $18 per troy ounce.
“At MCX Gold closed below 43000 and silver closed below 48000. Due to very high volatility in global equities we expect both the precious metals remain volatile today and gold is expected to hold $1622 per troy ounce and silver is expected to hold $17.70 per troy ounce,” Manoj Jain, Director & Head of Commodities, IndiaNivesh told Moneycontrol.
“If gold corrected towards 42000 levels will be an opportunity to buy again and if silver prices corrected towards 46800 will be an opportunity to buy again,” he said.
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Expert: Jateen Trivedi, Senior Research Analyst - Commodity & Currency at LKP Securities Ltd
On the daily chart, Gold traded negative on Tuesday, Gold prices fell around 2 percent on Tuesday as investors chose to pocket profits after the metal hit a seven-year high in the previous session.
Overall the trend remains positive. RSI & MACD are signaling trend to be heavy. Some profit booking can be on cards as overbought levels are indicated on the charts.
For the day 42750-42925 will act as resistance whereas 42600-42325 as supports.
Expert: Hareesh V, Head of Commodity at Geojit Financial Services.
The rapid spread of coronavirus outside China and its possible negative global economic impact supports gold’s haven demand. Hints that the epidemic could hit global equities and treasury yields. This is likely to push investors to seek safety in gold. Meanwhile, policy easing measures from various central banks to shore up the economy and moderate physical market activities are likely to limit major upside.
Technical outlook: While prices stay above $1620 expect rallies to continue with stiff resistance is seen at $1662 followed by $1695 levels. A close below $1595 is required to negate the bullish outlook.
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