Gold was trading higher in Indian markets on April 8 on positive international spot prices that were supported by rising virus cases and a loose monetary policy stance of major central banks.
On the Multi-Commodity Exchange (MCX), June gold contracts were trading higher by 0.93 percent at Rs 46,344 for 10 grams at 0920 hours. May silver futures were trading 1.1 percent higher at Rs 66,660 a kilogram.
Gold closed marginally in the red in the international market on April 7 but gained in the domestic market, tracking weakness in the rupee. Spot Gold weakened as US dollar and bond yields steadied amid lack of any fresh cues from FOMC minutes, say experts.
The minutes from last month’s FOMC meeting were released on April 7 and indicated that the Federal Reserve members unanimously recommended leaving the Fed funds rate between zero and 0.25 percent.
“Comex gold trades marginally lower near $ 1,738/oz after a 0.1 percent decline yesterday. Gold weakened as US dollar and bond yields steadied amid lack of any fresh cues from FOMC minutes. Also weighing on gold is upbeat global growth outlook and continuing ETF outflows,” Ravindra Rao, VP- Head Commodity Research at Kotak Securities told Moneycontrol.
“However, supporting price is rising virus cases, loose monetary policy stance of major central banks and improvement in consumer demand. Gold may witness choppy trade, however, general bias may be on the upside on dovish central bank stance,”
June gold futures contract settled at $ 1,741.60 with a minor loss and May silver contract settled at $ 25.25 per troy ounce with a minor gain. Both precious metals settled on a positive note in the domestic markets.
“Indian rupee tumbled to more than four months low on Wednesday and supported both the precious metals in the domestic markets. The Reserve Bank of India’s formal bond-buying programme of Rs 25,000 crores hammered rupee on Wednesday,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“We expect rising inflation in the United States and weakness in the rupee could continue to support both precious metals and buy on dips strategy to continue to work in both the precious metals,” he said.
On MCX, gold has support at Rs 46,100-45,920 and resistance at Rs 46,580-46,800. Silver has support at Rs 66,100-65,500 and resistance at Rs 67,200-68,100 levels. “We suggest buying in the gold on dips around Rs 46,100 with a stop loss at Rs 45,770 for the target of Rs 46,800 and in silver buy around Rs 66,100 with a stop loss of Rs 65,500 for the target of Rs 67,500,” he added.
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Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold and silver prices ended lower on April 7 after rising for two consecutive sessions. Domestic gold and silver rose as the rupee depreciated.
The dollar and the benchmark yields rebounded and halted the upward momentum in the yellow metal.
The minutes from last month’s FOMC meeting indicated that Federal Reserve recommended leaving the fund rate between zero and .25 percent.
Technically, MCX June gold has given a breakout above Rs 46,000, indicating that the positive trend will continue up to Rs 46,400-46,700.
MCX May silver could see an upside momentum up to Rs 66,900-68,000, however, a trade below could pull prices to Rs 66,000.
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