Gold prices rose 2.19 per cent during the week to pay Rs 47,760 per 10 grams for safe purchases between growing coronavirus cases and details of weak US operations, but the set side was bound by a strong rupee. The weakness of the dollar and the declining yield helped revive some bullion purchases after last week’s decline.
Gold and silver have emerged in their categories this week.
The yellow metal has increased fourfold in five trades on the MCX and ended the week earning Rs 1,023. On the other hand, COMEX gold rose by $ 63.35 or 3.58 percent over the same period.
The bullion metal was traded below the moving averages of 5, 20, 50 and 100 days but higher than the averages moving 200 days on the daily chart. The Relative Strength Index (RSI) index is at 60.93, indicating an increase in prices.
also read : Philip Morris phase out cigarettes in Japan within ten years
In short gold and silver have both received a shock from US Treasury spokeswoman Janet Yellen who said US interest rates may need to rise to keep the economy afloat as more aid programs come online. However, the markets ignored Janet Yellen’s remarks yesterday, and saw the fact that the Fed may not be in a position to raise prices at this point.
More and more, bullion has also gained momentum this week as several Fed officials expect monetary policy to remain much simpler for a while despite the US economy recovering.
The local rupee increased by 0.77% compared to the weekly dollar.
The US dollar index slides 0.81 percent to close to 90.20 compared to its rival currencies. The dollar index ended at a loss of 1.15 percent during the week and at the lowest level since February 24.
CFTC data has shown that financial managers have increased their positions by 2,979 last week.
ETF gold seizures confirmed entry as SPDR Gold Shares’ catch rose to 1,025 tons from 1017 tons last week.
also read : Analysis | Bandhan Bank Q4 numbers put pressure on its books; the worst is not over yet
“Gold prices have seen strong purchases during the week hit 10-week high levels exceeding $ 1,800 per hour resistance. Gold prices are associated with the fall of the dollar and the decline in US bonds in US Treasury Secretary Jennet Yellen’s speculation on interest rates. The dollar index fell by more than 1% to 90.23 marks and the US 10-year cash yield dropped to 1.58% during the week, ”said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.
“Gold prices gained momentum in the weaker US market data on Friday as unemployment among Americans rose by 6.1% in April. The state of the Federal Fed and the slow economic recovery in the US are key factors in rising gold prices. Inflation could raise concerns about high inflation in the market, ”he said.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited said, “The future of MCX Gold is declining for the last two courses in a row and the price is trading on 100 days of SMA on the daily chart. If the 10-year yield decreases slightly, it is likely that the gold markets will start to strengthen again from this level. If we cancel the rates of Rs 48,400, then we can follow up with Rs 49,700 ”.
The local gold / silver rating now stands at 66.70 to 1 indicating that the gold is superior to silver.
Spot gold settled at a profit of $ 15.95 for a $ 1,831.13 ounce in London.
The gold futures for June delivery increased by Rs 165, or 0.35 percent, to stay at Rs 47,760 per 10 grams with a business profit of 9,761 lots. The same in August increased by Rs 231, or 0.48 percent, to Rs 48,150 in business profits of 4,575 lots.
OUTLOOK
The price action may also depend on the Treasury and Dollar harvest move next week. However, non-farm payments tonight could also drive the market over time.
Earlier on the economic calendar, we have CPI, PPI and sales data, followed by the Fed.
Inflation will support gold as a barrier to inflation, but may also tempt the Fed to operate. However, in the medium to long-term horizon, gold and silver may continue their Fed-based proportions.
Technology
Sriram Iyer, Senior Research Researcher at Reliance Securities said, “On the charts, the LBMA Gold Spot has released a budget of more than $ 1,800 and will need to stabilize above the level to confirm the continuation of the current bullish momentum. Costs are at $ 1,840 and $ 1,865 and a break above both levels will quickly push prices up to $ 1,900 levels. At the same time, a break of less than $ 1,800 will return prices to $ 1,775 levels. ”
“Internally, MCX Gold June has offered an exit above Rs 47,250 and will need to be above-average to see the current momentum. Fees are Rs 47,950 and Rs 48,000 and a break above both levels will push prices to Rs 48,400 ”, Iyer said.
also read : If you want to create wealth, do not take quick decision
Purohit anticipates that there will be an initial drop in the price of MCX Gold next week starting from where we can get support close to Rs 47,200-47,250 and this could be the right distance to buy a June contract of interest at Rs 48,400, keeping a stop loss of Rs 46,800.
RECOMMENDATION
Reliance Securities advises its clients to buy Gold June futures above Rs 47,300 with a loss of Rs 47,100 and a target of Rs 47,800.
Patel expects gold prices to trade next week with COMEX gold resistance area at $ 1,860 per hour and support at $ 1,795 per hour. At MCX, Gold prices in June are close to a time resistance of Rs 48,400 per 10 grams and a subsidy of Rs 46,600 per 10 grams.
