Gold prices posted their biggest weekly decline last week since March on investor concerns over a potential pullback in central bank stimulus amid signs the recovery is gathering pace.
Gold prices edged lower on Monday tracking the muted trends in the international market. On the Multi-Commodity Exchange (MCX), the gold futures dropped 0.21% to Rs 48,890 for 10 grams at 1610 hours IST. July silver futures were down too. The metal plunged 0.66% to Rs 71,069 for a kilogram on June 7.
In the international market, gold prices fell on Monday as an uptick in the dollar dented the metal’s appeal. Spot gold was down 0.2% at $1,886.76 per ounce as of 0308 GMT, after rising more than 1% in the previous session. US gold futures eased 0.1% to $1,889.60 per ounce. The dollar index rose 0.1% against its rivals, making gold more expensive for holders of other currencies.
“Gold saw a lot of volatility last week — first falling more than $40 and then climbing back up towards the $1,900 an ounce level. And the bull trend is far from over. The yellow metal is extremely sensitive to the Federal Reserve’s taper talk, the US dollar, and the US Treasury yields. Any spike in these drivers leads to lower gold, while a reversal triggers another gold rally,” said Amit Khare, AVP- research commodities, Ganganagar Commodities Limited.
“Gold and Silver both are overall in up trend but today we can see some profit booking again as per technical chart, So traders are advise to go for short in small bounce and traders should also focus some important technical levels given below for the day: August Gold closing price Rs 48,994, Support 1 – Rs 48,570, Support 2 – RS 48,000, Resistance 1 – RS 49,400, Resistance 2 – Rs 49,800. July Silver closing price 71,539, Support 1 – Rs 70,700, Support 2 – Rs 69,600, Resistance 1 – Rs 72,350, Resistance 2 – Rs 73,100,” Khare added.
“International spot gold and silver rebounded on Friday after US nonfarm payrolls did not rise as much as expected, although bullion was still on course to register its biggest weekly decline since March. US nonfarm payrolls increased by 559,000 last month versus 650,000 forecast in a Reuters poll, while new orders for US-made goods fell more than expected in April. The US Dollar gave up most of its gains, while benchmark 10-year Treasury yields also moved lower and also lent support,” Sriram Iyer, senior research analyst at Reliance Securities said.
“According to data from CFTC, gold speculators raised their net longs by 2,944 contracts to 129,846 in the week to June 01, while silver speculators cut their net longs by 2,766 contracts to 42,529 in the week to June 1,” he mentioned.
“International spot gold and silver prices have started flat this Monday morning in Asian trade helped by a pullback in the dollar and lower bond yields. Technically, LBMA Gold Spot could trade on Bearish note where support is at $1880-$1866 levels. Resistance is at $1896-$1903 levels. LBMA Silver could trade in a range of $26.70-$28.30 levels,” Iyer added.
“Domestic gold and silver prices could start flat this Monday morning tracking overseas prices. On the domestic front, MCX Gold August below Rs 49,000 could see a downside pressure up to Rs 48,850-48600 levels. Resistance is at Rs 49,100-49250 levels. MCX Silver July holds a support near Rs 70,900-70,200 levels. Resistance is at RS 71,600-72,300 levels,” he added.
“Gold prices posted their biggest weekly decline last week since March on investor concerns over a potential pullback in central bank stimulus amid signs the recovery is gathering pace. Overall, we expect gold prices to consolidate in the range of Rs 48,600-49600 levels in the short term,” said ICICI Securities reports.