Gold Price Today: Rates rise in early trade; should you buy or wait?


Gold prices traded slightly higher in the morning trade in the domestic futures market on Friday (May 26) tracking global cues. The yellow metal rose in the international market as the dollar eased from a two-month high while traders and investors sought more clarity on the progress of US debt ceiling talks. The Federal Reserve’s next policy move on June 13-14 is also a key factor that is in the focus of traders.

Gold prices inched up on MCX but the gains were capped amid improved sentiment in the domestic equity market and the dollar’s recent gains.

The dollar dipped slightly on Friday but still stood near a two-month high against its major peers and the benchmark Treasury yields were also elevated on expectations that the Fed may keep interest rates at higher levels for a longer than expected period.

“Gold prices languished near a two-month low on Friday and were set for their third straight weekly fall, as progress in the US deal ceiling negotiations bolstered the dollar,” said brokerage firm Motilal Oswal Financial Services.

Dollar’s rise makes gold expensive in other currencies and erodes its safe-haven appeal.

Motilal Oswal believes better-than-expected economic numbers from the US are adding pressure on gold. “Growth number from the US was reported at 1.3 per cent against expectations of 1.1 per cent. Also, new US jobless claims rose moderately last week, indicating persistent labour market strength,” Motilal Oswal pointed out.

MCX Gold June futures traded 0.10 per cent higher at 59520 pr 10 gram around 10:15 am.

What should be your strategy?

Most analysts and brokerage firms expect gold to remain volatile for the session as traders remain cautious about the US debt ceiling negotiations. Trends from the spot market are also subdued which is not going to offer much support to the bullion in futures trade.

Brokerage firm Motilal Oswal expects MCX Gold to trade in a range of 59,300-60,000, with support in the range of 59,350-59,100 and resistance in the range of 59,750-60,050.

Manoj Kumar Jain of Prithvifinmart Commodity Research expects gold and silver prices to remain volatile in today’s session amid US debt ceiling negotiations and volatility in the dollar index and continue to face resistance at higher levels.

“Gold has support at $1,934-1,922, while resistance at $1,954-1,968 per troy ounce. Silver has support at $22.68-22.40, while resistance is at $23.20-23.44 per troy ounce. At MCX, gold is having support at 59,280-59,000 and resistance at 59,660-59,850 while silver is having support at 69,800-69,100 and resistance at 70,750-71,300,” said Jain, suggesting selling gold on the rise around 59,650 with a stop loss of 59,900 for the target of 59,100.

Rahul Kalantri, VP of Commodities at Mehta Equities expects gold and silver to remain volatile in today’s session.

“Gold has support at $1,930-1,920 while resistance at $1,954-1,962. Silver has support at $22.55-22.40, while resistance is at $23.05-23.22. In the Indian rupee terms, gold has support at 59,240-59,080, while resistance is at 59,720, 59,950. Silver has support at 69,580-69,220, while resistance is at 70,640–71,120,” said Kalantri.

Disclaimer: The views and recommendations given in this article are those of individual analysts and brokerage firms. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Article Source:Money Control

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