Gold prices were trading higher on Wednesday, after declining half a per cent in the previous session. In the past five trading sessions, gold prices have fallen nearly 5 per cent
Gold prices were trading higher on Wednesday, after declining half a per cent in the previous session. In the past five trading sessions, gold prices have fallen nearly 5 per cent. Meanwhile, investors await the speech by US Federal Reserve Chair Jerome Powell this week. On MCX, gold October futures were trading Rs 136 or 0.27 per cent higher at Rs 51,060 per 10 gram, while silver September futures fell Rs 186 or 0.29 per cent to Rs 63,821 per kg. “With Jerome Powell speaking at Jackson Hole tomorrow, that could give us a little bit of directionality on the US dollar, which could influence gold/silver prices,” Bhavik Patel, Senior Technical Research Analyst at Tradebulls Securities, told Financial Express Online. Patel also added that the 50 day EMA comes at $1897 and any closing below that would certainly give bears an edge and “we might see gold slipping till $1860”.
International gold prices were unchanged on Wednesday as worries over the global economic outlook offset pressure from signs of progress in US-China trade negotiations, while investors await a speech from U.S. Federal Reserve Chairman Jerome Powell, said a Reuters report. “Gold may continue to witness choppy trade unless we get more clarity on Fed’s stance and thereby trend in US dollar however buying interest may emerge at lower levels,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
Spot gold was flat at $1,928.35 per ounce. US gold futures rose 0.6 per cent to $1,934.70. Among other precious metals, silver fell 0.3 per cent to $26.35 per ounce, platinum eased 0.1 per cent to $926, and palladium slipped 0.7 per cent to $2,149.97.
What should be trading strategy?
Bhavik Patel advised traders to remain light in their position ahead of a statement from Jerome Powell at Jackson Hole tomorrow as volatility might shoot up after his speech. “But in medium-term, gold still looks positive because of the risks to the global economic outlook and election uncertainty. Any further dip below Rs 50000 will be a good opportunity to accumulate gold,” he added.
More fall in gold prices on cards
Ajay Kedia, MD, Kedia Advisory said that technically gold prices have completed forming the head and shoulders pattern on the chart. Kedia also added that there are chances of more decline in the upcoming sessions, which targets 50640 – 50440 levels mainly, noting that holding below 51240 or sustained below 51560 levels will be a sign of weakness.