Notwithstanding a firmer dollar index (DXY), gold prices held their ground on Tuesday in hopes of an early rate cut as softer inflation numbers in the US lifted sentiments. The domestic yellow metal prices took cues from their overseas peers and traded with a positive bias.

The MCX June gold futures were trading at Rs 68,644 per 10 grams around 9:10 am, rising Rs 313 or 0.46% while May silver futures were trading at Rs 76,076 per kg, higher by Rs 544 or 0.72%.

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Dollar Index (DXY) is hovering above the 104 mark against a basket of six top currencies at 104.33, down by 0.02 points or 0.02%. It has narrowed gains to 0.32% over the past five trading sessions.

Gold is trading near record levels, recovering some of the lost ground in previous weeks. It is shy of its lifetime high of Rs 66,943 by just over Rs 400. In the international markets, the prices had shot-up above the $2,220 per troy ounce mark.

MCX Gold and Silver futures ended with gains on Monday with the April gold contract hitting a fresh lifetime high of Rs 69,487 before settling the day with an uptick of Rs 170 per 10 grams or 0.25% at Rs 68,459. Meanwhile the May silver contract ended flat at Rs 75,568, up by Rs 36 or 0.05%.On Comex, the gold futures have scripted a lifetime high of $2,286 per troy ounce.The dollar index (DXY) breached the 105 mark, extending its gains over the past five sessions to 0.78%. On Tuesday, around 9 am India time, it was trading at 105.04, up by 0.03 points or 0.02%.

Gold has been trading with positivity amid geopolitical tension in the Middle East but the recent uptick in prices has been on account of growing hopes of rate cut by the US Federal Reserve, Anuj Gupta, Head Commodity & Currency, HDFC Securities said.

The prices have risen by 0.90% or Rs 612 on MCX in April so far, Anuj Gupta, Head Commodity & Currency, HDFC Securities said. On the year-to-date basis, the uptick is Rs 5,086 or 8.05%. As for the Silver contract, previous month’s gains stand at 0.64% or Rs 484 while the YTD gains at 1.48% or Rs 1102, Gupta added.

Price of gold in major physical bullion markets like Delhi, Ahmedabad and other cities is Rs 68,500 per 10 grams while those of 1 kg of Silver is Rs 76,500, Gupta said.

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“Gold’s price soared to a record high before dropping slightly due to reassessments of the Federal Reserve’s potential interest rate cuts, prompted by strong U.S. manufacturing data. Despite a slight cool down in inflation, expectations of monetary easing, geopolitical tensions, and significant buying in China have supported gold’s rise this year. However, recent statements by Fed Chair Jerome Powell suggest no immediate rate cuts, with the market closely watching upcoming US economic data for further clues,” Neha Qureshi, Senior Technical & Derivative Analyst at Anand Rathi Commodities & Currencies said.

On the Daily chart, MCX Gold futures have surpassed its rising channel pattern, showing a pattern of ascending highs and lows, indicating an upward momentum, Qureshi said as she warned against the likelihood of a pullback in prices with RSI hitting the overbought zone. The Anand Rathi analyst sees resistance at Rs 68,150- Rs 68,900 while support at Rs 67,600- Rs 67,000.

Intraday trading strategy by Neha Qureshi

– Buy MCX June gold futures at Rs 68,400 with a stop loss of Rs 68,000 and a price target of Rs 68,900.

– Buy MCX May silver futures at Rs 75,600 with a stop loss of Rs 74,600 and a price target of Rs 77,600.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


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