Sell MCX Gold August contract in the range of Rs 34,650-34,700 with a stop loss of Rs 34,850 and a target price of Rs 34,300
Pritam Kumar Patnaik
Last week, gold prices witnessed a sharp fall after stronger than expected US non-farm payroll data that reduced the expectation of an immediate rate cut by the US Fed Reserve. This saw gold prices falling below $1,400 per ounce. Gold prices last week, plunged from its high of $1,440 to $1,380-1,385, before stabilising around at $1,400.
There have been expectations that the US Federal Reserve would cut rates by 50 basis point in July. However, with the US economy adding 224,000 new jobs in June, hopes of an immediate rate cut were dashed. The data was much stronger than expected and had a negative impact on gold prices.
The biggest event this week is going to be the Fed Chair Jerome Powell’s testimony in front of Congress on July 10-11 with the market scouring for clues as to the timing and pace of the next rate cut. It is widely expected that the US Fed is going to adopt a wait and watch approach, they would require a lot more compelling data prior to taking a call on the rates. Now, it would be advisable to sell on rallies for the near term.
Meanwhile, the MCX Gold has shown a huge spike on the upside to Rs 35,100 per 10 grams following the 25 percent rise in import duty to 12.5 percent from 10 percent. Gold prices in the domestic market managed to close at Rs 34,600.
Internationally, LBMA Gold spot dived below $1,410 and broke the trendline support that can keep the trend in sell-on-rallies mode. On downside, $1,380 is the support to watch out.
Strategy for MCX Gold August 2019 contract for the week is ‘Sell’ in the range of Rs 34,650-34,700 with a stop loss of Rs 34,850 and a target price of Rs 34,300.
Crude: Sell MCX Crude July 2019 contract in the range of Rs 4,000-4,020 with a stop loss of Rs 4,100 and a target price of Rs 3,850.
Copper: Sell Copper July 2019 contract in the range of Rs 443-444 with a stop loss of Rs 448 and target price of Rs 433-432.
Nickel: Sell Nickel July 2019 contract in the range of Rs 900-905 with a stop loss of Rs 915 and target price of Rs 865.
Lead: Buy MCX Lead July 2019 contract in the range of Rs 153-153.50 with a stop loss of Rs 154.60 and target price of Rs 149.50-149.00.
Soybean: Sell NCDEX Soybean July 2019 contract in the range of Rs 3,620-3,640 with a stop loss of Rs 3,690 and a target price of Rs 3,520.
The author is Head Commodities at Reliance Commodities.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.