Gold Price Falls For Second Straight Day; Lucrative Option for Investors, Says Expert

Gold prices in Indian market remained under pressure on Friday, tracking the global trends. On Multi Commodity Exchange (MCX), June gold futures dropped by 0.25% to Rs 48,423 for 10 gram at 9.30 am. Silver continued to plunge for the third straight day. On MCX, silver futures were down by 0.7% to Rs 71,800 per kilogram.

In the international market, gold slipped on Friday. Spot gold was down 0.3% at $1,871.50 per ounce by 0253 GMT, but it has risen 1.6% this week. US gold futures fell 0.6% to $1,871. The dollar was headed for a weekly loss, while benchmark 10-year Treasury yields plunged.

“International spot gold and silver prices have started flat to marginally weaker this Friday morning in Asian trade. The US bond yields, and the greenback have started weaker this Friday morning in Asian trade and could limit downside,” said Sriram Iyer, senior research analyst at Reliance Securities.

“Technically, LBMA Gold Spot will continue its bullish note near $1870 levels where further could see $1885-1894 levels. Support is at $1863-$1855 levels.LBMA Silver is holding well above $27.00 level could trade on bullish momentum up to $28.20-$28.90 levels. Support is at $27.25-$26.77 levels.

“Domestic gold and silver prices could start flat to marginally higher tracking overseas prices. Technically, if MCX Gold June breaks out above Rs 48,400 we could witness an upside push up to Rs 48,800-49,100 levels. Support is at Rs 48,350-48,150 levels. MCX Silver July has given a breakout Rs 72,000 can take prices up to Rs 73,200-74,000 levels. Support is at Rs 71,500-70,400 levels,” Iyer added.

“Gold futures basis, the most active June 2021 Comex contract is currently fixed at $1877.40 off $4.10. Gold traded to a high on Friday of $1885.30, which is below Thursday’s high. However, it traded to a higher low of $1864.20 when compared to yesterday’s trading range. Most importantly, gold now, for the fourth consecutive day, has remained above a key and critical support level, which is a price band between $1843.70 (the 61.8% Fibonacci retracement) and $1851.70, which is a current fixed on the 200-day moving average,” said Amit Khare, AVP- research commodities, Ganganagar Commodities Limited.

The minutes of last month’s Federal Open Market Committee meeting created volatile price swings in gold futures resulting in a low yesterday just at the 200-day moving average. However, gold was able to recover quite nicely as it settled at approximately $1881, he added.

“We saw some profit booking in both precious metals on Thursday that may continue. Traders are advised to go short on rise and also focus important technical levels given below: June Gold closing price Rs 48,544, Support 1 – Rs 48,300, Support 2 – Rs 48,000, Resistance 1 – Rs 48,770, Resistance 2 – Rs 49,100. July Silver closing price Rs 72,304, Support 1 – Rs 71,700, Support 2 – Rs 70,800, Resistance 1 – Rs 73,000, Resistance 2 – Rs 73,700,” Khare added.

“As of now the India is having a fair share of gold price with lowered rate overall making it a lucrative option for investment. However if talk about international rates, it has been plane with a higher note due to stronger dollar and bonds,” said Amit Gupta, managing director, SAG Infotech.

“MCX June: If unable to move past the immediate resistance of Rs 49,600, there are chances of corrective selling pressure for the day. Anyhow, major support is placed at Rs 46,920,” Hareesh V, research head, commodities at Geojit Financial Services.