In the noon deals on MCX, gold August futures were trading Rs 72 or 0.15 per cent down at Rs 47,872 per 10 grams.
Gold prices witnessed some profit booking in Tuesday’s session after touching a record high of Rs 48,289 per 10 grams in the previous session. In the noon deals on MCX, gold August futures were trading Rs 72 or 0.15 per cent down at Rs 47,872 per 10 grams, while silver July futures were ruling at Rs 48,208 per kg, down Rs 292 or 0.60 per cent. “On MCX, gold hit fresh high yesterday and in COMEX it breached its immediate resistance of $1750 confirming its bullish trend,” senior technical analyst Bhavik Patel, Tradebulls Securities, told Financial Express Online. “Institutional money managers are also adding long positions in gold futures as this week we saw the first increase in speculative net long positions after four weeks,” Patel added.
Meanwhile, coronavirus cases continue to spike in India. India reported the highest single-day spike of 14,933 new coronavirus cases, taking the total tally to 4,40,215 and death toll at 14,011. “Gold is seen as a safe haven during times of economic turmoil and benefited the global investors as they were unnerved after the WHO reported a record jump in global infections of the coronavirus,” Ajay Kedia, MD, Kedia Advisory told Financial Express Online.
What should be investors’ strategy?
A surge in coronavirus cases in India and elsewhere amid geopolitical instability lifted the safe-haven demand among the investors. “Next target for gold is around the psychological level of Rs 50,000 and $1800 in COMEX. Investors should be looking for any dip to accumulate gold as the underlying trend remains bullish. Any dip towards 47300-47000 would be an ideal level to accumulate long positions in gold,” Bhavik Patel added.
Gold analysts are bullish on gold and recommend to buy the yellow metal. “For today’s perspective, we recommend to buy gold, traders can buy gold around 47700 to 47750 levels, with the stop loss of 47450, and for the target of 48150 levels,” said Anuj Gupta (DVP–Commodities & Currencies Research, Angel Broking).
Two US Federal Reserve officials last week warned that the unemployment rate could rise again if the disease is not brought under control. “Everything looks firm for gold after the new outbreak of COVID-19 cases raised the fears that economic recovery could slow, so investors have to start pricing this in. If the cycle repeats then the government and the Fed will have to provide more stimuli. This should be supportive for gold and after some pull-back gold can test 50,000.00 soon,” Ajay Kedia added.