Gold inches up from Rs 47,000/10 gm, silver reclaims Rs 70,000/kg. What analysts say

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Domestic gold prices registered mild gains on Thursday as a weakening dollar overseas made the yellow metal more attractive for holders of other currencies.

MCX gold futures (delivery on June 4) traded 0.18 per cent higher at Rs 47,086 per 10 grams at the last count, having risen to as high as Rs 47,263 during the session so far.

MCX silver futures (July 5) quoted at Rs 70,100, up 0.69 per cent from their previous close.

The rupee gained by 13 paise to end at 73.78 against the dollar, supported by weakness in the greenback overseas.

The dollar index – which gauges the US currency against six peers – declined as much as 0.34 per cent to 90.90 on Thursday, and was last seen at 91.05.

Spot gold stood 0.23 per cent stronger on the day at $1,790.84 per ounce while silver was up 0.70 per cent at $26.67 per ounce.

Analysts say softer-than-expected services and non-farm jobs data from the US support both precious metals at lower levels but volatility cannot be ruled out in the near term due to currency fluctuations.

Back home, spot gold was at Rs 46,992 per 10 grams and silver at Rs 69,300 per kilogram, excluding GST, according to Mumbai-based industry body IBJA.

Gains on Dalal Street kept the upside in precious metals in check. Equity benchmarks S&P BSE Sensex and NSE Nifty 50 extended gains to a second straight day though investors remained cautious as they assessed the vaccinations against the record jumps in daily cases.

“We expect both precious metals to remain volatile in ahead of US unemployment claims data with moves expected on either side.”

— Manoj Kumar Jain, Prithvi Finmart

Buying in defensives such as IT helped Sensex end 272.21 points, or 0.56 per cent, higher at 48,949.76 and the Nifty at 14,724.80, up 106.95 points, or 0.73 per cent, from its previous close.

Typically, equities share an inverse relationship with bullion as improved risk appetite moves investors away from safe havens.

What analysts say

“The US trade deficit jumped to a record high in March amid roaring domestic demand, which is drawing in imports, supporting the metal prices,” said Navneet Damani, VP-Commodities Research, Motilal Oswal Financial Services.

He expects COMEX gold to move within a range of $1,765-1,810 per ounce in the near term and MCX gold between Rs 46,750 and Rs 47,320 per 10 grams.

Technical view

“At MCX, gold has support at Rs 46,800-46,650 and resistance at Rs 47,180-47,440, and silver support at Rs 69,100-68,500 and resistance at Rs 69,700-71,400,” said Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart.

Jain suggests buying gold around Rs 46,850 for a target of Rs 47,300 with a stop loss at Rs 46,640.

Market participants will watch US non-farm jobs data due on Friday closely for cues.

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