Gold and the safe-haven dollar pulled back from near their peaks on Monday when gold prices on MCX for June futures contracts fell by Rs 721 or nearly 1% to trade at Rs 72,085 per 10 grams while MCX May silver contracts were down Rs 1,313 or 1.6% to Rs 82,194 per kg.
On Friday, the gold June futures contract settled at Rs72,806 per 10 grams while the silver May futures contract settled at Rs 83,507 per kilogram. Precious metals have pulled back after a streak of highs in the previous weeks.
“Gold’s price decreased slightly due to reduced geopolitical tensions in the Middle East, which diminished its appeal as a safe investment. Despite ongoing conflicts between Israel and Iran, the situation seems to be stabilizing as both sides downplay the severity of recent strikes. Investors are now shifting their focus to upcoming U.S. economic data, specifically the personal consumption expenditures price index, which could influence Federal Reserve decisions on interest rates,” states Neha Qureshi, Senior technical & derivative analyst of Anand Rathi Commodities & Currencies.
Higher interest rates generally make gold less attractive since it does not yield interest. Despite these factors, according to Neha, gold’s price remains significantly higher this year due to strong demand from central banks and buyers in Asia, particularly China.
In the U.S. markets, Gold slid 0.6% to $2,376.40, retreating from near the all-time peak of $2,431.29 from last week.
Today, the US Dollar Index, DXY, was hovering near the 106.06 mark, rising 0.10 or 0.09%.
On the daily chart, as per Qureshi, the June gold futures have formed a bearish engulfing candlestick pattern not able to sustain above 73,300 which is a strong resistance zone suggesting a potential downturn. The Relative Strength Index (RSI) has entered the overbought territory and is displaying negative divergences, which supports the bearish outlook. The key resistance levels to watch are at 73,300 and 73,958, while the support levels are situated at 72,300 and 72,020.
Intraday Trading Strategy by Neha Qureshi:
– Sell MCX JUNE Gold futures at Rs 72700 with a stop loss of Rs 73200 and a price target of Rs 72000
– Sell MCX MAY Silver futures at Rs 83400 with a stop loss of Rs 84400 and a price target of Rs 81400
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
