Gold prices were trading lower in Indian markets on Thursday after surging to a one-month high of Rs 46,400 in the previous session.
Gold prices were trading lower in Indian markets on Thursday after surging to a one-month high of Rs 46,400 in the previous session. On MCX, gold June futures were trading Rs 110 or 0.24 per cent down at Rs 46,252 per 10 grams as against the previous close of Rs 46,362. Silver May futures were ruling at Rs 66,400 per kg, down Rs 234 or 0.35 per cent, as compared to a previous close of Rs 66,634 on the Multi Commodity Exchange. MCX gold hit an all-time of Rs 56,191 per 10 grams last year in August. Since then, the yellow metal has been witnessing volatility.
From a record high level, gold prices have plunged Rs 9,939 per 10 gram or 17.68 per cent. Gold meanwhile has bounced from the lows around $1686 but has failed to maintain momentum on the upside, said Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities. Gold retook its position above $1700 as Fed remains unconcerned about inflation or rising bond yields. Although US bond yields have risen, the latest US Fed meeting showed that the US central bank is in no hurry to change its current ultra-accommodative monetary policy, a positive for gold. “For the medium term, gold is right now in the time of uncertainty as the bulls and bears are fighting for control. In MCX, Gold has made a double bottom around Rs 44,150 and managed to breach the narrow trading range of Rs 44,300-45,300 to which it was stuck for the majority of the month in March,” Patel told Financial Express Online.
Bhavik Patel also said that the range breakout dictates that the short term trend is bullish and investors should maintain buy on dips strategy. “Any downside near Rs 45,700 would be an ideal level for long positions with an expected target of Rs 46,500 and stop loss of Rs 45,400,” he added.
Globally, gold prices steadied after early falls on Thursday, as market participants weighed the US Federal Reserve’s commitment to keep interest rates low for some time against likely higher inflation. Spot gold was flat at $1,737.89 per ounce, while US gold futures fell 0.1 per cent to $1,739.20 per ounce, according to Reuters.
Yesterday gold prices surged due to weakness in the Indian Rupee against the US dollar. The Reserve Bank of India (RBI) also announced that its policy rate would remain unchanged and will retain the accommodative stance till prospects of sustained recovery are well secured. “MCX Gold June has given a breakout above 46000 level indicating a positive trend to continue up to 46400-46700 levels. Support is at 45950-45800 levels,” Kshitij Purohit, Lead Commodities & Currency at CapitalVia Global Research, told Financial Express Online. Also, last night FOMC meeting minutes came and Federal Reserve members unanimously recommended leaving the Fed funds rate near to zero. “The first short-term range is 47200 to 44600 and 46600 – 46700 is the first upside target and potential resistance,” Purohit added.