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Gold, silver prices fall on weak international cues; check MCX gold, silver, COMEX trading strategies

COMEX gold trades little changed near $1790/oz after a 1.4% gain yesterday. Image: Reuters

Gold prices were trading flat to negative on Tuesday, following international prices as a stronger dollar and comments from US Fed Chairman Jerome Powell on the economy weighed on yellow metal’s safe-haven appeal. MCX gold June futures were trading Rs 34 down at Rs 47,285 per 10 gram, against the previous close of Rs 47,319. Silver July futures were ruling at Rs 70,738 per kg, down Rs 162 or 0.23 per cent. In the previous session, silver futures ended at Rs 70,900 per kg. Globally, spot gold was down 0.2 per cent at $1,789.02 per ounce. The metal touched its highest since February 25, at $1,797.75 on Monday. US gold futures fell 0.2 per cent to $1,788.80 per ounce, according to Reuters.

Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities

Gold futures had strong and respectable gain yesterday as COMEX contract gained by $25 and in MCX, despite strong rupee, MCX Gold gained by nearly Rs.400 from yesterday’s opening tick. Factor which contributed to yesterday’s gain was the weak US dollar and slightly lower US Treasury yields. Lower than expected IHS Markit U.S. manufacturing activity pushed the US Dollar down. Yellen’s inflation outlook has helped to keep a cap on bond yields as she believes the massive infrastructure program won’t impact inflation as the program would be spread over next ten years. This has helped shift some of the sentiment from the bond market to the gold market and that is why we are seeing some fresh demand for gold.

Although gold prices have been unable to break above $1,800 an ounce, I am still optimistic that this level will eventually break. The key macroeconomic data for gold will release this Friday which is US jobs report from April. Hedge funds are increasing their bearish bets as gold is unable to cross $1800 level but we believe tide will be turned once gold sustains above $1800 level. In MCX, we still recommend to buy on dips near Rs 47,000 with expected target of Rs 47,700 and stoploss of Rs 46,500. Short term support for gold is Rs 46,450 and any upside momentum will only shift if gold closes below that level.

NS Ramaswamy, Head of Commodities, Ventura Securities

Today, we expect the MCX Gold June price to trade positive for intraday. Yesterday, It has sharply closed above the 20-day moving average and today it is likely to cross above the 100-day moving average. On the hourly chart, MCX GOLD prices have closed above the key averages which will help the prices to rise further. Once prices start trading above 47,500 level then prices are likely to cross 48,000 level. On the downside 46,800 will be the key support for the price. On the Comex front, the Gold price will face strong resistance at $1800/ounce and breaking above which, next leg of the rally will head towards $1850/ounce in the coming sessions.

MCX SILVER Jul prices are looking bullish for the intraday. The RSI indicator on the daily chart has moved in the positive zone suggesting a strong momentum on the upside. Breaking above the recent high of 71,500 levels, we may see prices heading towards 74,000 levels in the coming trading sessions. On the downside, the 20-day moving average will be the key support which is now seen at 69,000 level. On the Comex Front, the Silver price will face a strong hurdle zone at $27.00/ounce levels on a daily closing basis and breaking above which, next leg of the rally will march towards $27.50- $28.00/ounce levels in the coming trading sessions.

Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities

COMEX gold trades little changed near $1790/oz after a 1.4% gain yesterday. Gold stalled after failing to break past the $1800/oz level and volatility in the US dollar. The US currency fell yesterday on disappointing data and cautious comments by Fed officials but has inched up today supported by general US optimism. Amid other factors, support from rising virus cases and loose monetary policy stance of major central banks is countered by weaker investor interest and concerns about Indian demand. Choppiness in the US dollar as market players assess Fed’s monetary policy stance may keep gold volatile however general bias may be on the upside as central banks may maintain dovish stance.

Jigar Trivedi, Fundamental Research Analyst, Anand Rathi Shares and Stock Brokers

MCX Gold hit a more than two-month high in the previous session after the ISM PMI survey showed the US manufacturing sector expanded at a softer pace in April, due to slower growth rates for both new orders and employment. Gold was already gaining on the back of lower US Treasury yields and mounting concerns over the coronavirus crisis. The average daily rate of new COVID-19 cases around the world has been above 800,000 for more than a week, with India reporting more than 300,000 new infections for the 12th straight day. Investors now await a raft of US economic data this week, including non-farm payrolls. MCX silver July also sky rocketed above Rs. 70,000. Expectations of increased industrial demand as the economic recovery gather pace and a weaker dollar offered lasting support. Since the yellow metal has gained sharply in the previous session, it may experience a small correction but the tone is positive and we recommend to go long on every dip. Due to rise in industrial demand, silver too has gained momentum and we continue to remain bullish in silver.

(The views in this story are expressed by the respective experts of research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

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