Gold Price Outlook: Bullion to trade sideways this week. Buy on dips recommended
A weaker than expected non-farm payroll data in the US enthused bullion as the yellow metal ended with sharp gains on Friday. But the outlook for bullion is expected to remain sideways over this week, investors can find buying opportunities on dips.
While the unemployment rate retreated from its 7-month high, the numbers were far below the expectations, Reuters reported. This could cast doubts in the minds of Fed members whether to go ahead with the rate hike or not when the Federal Open Market Committee (FOMC) meets later this month.
This faded positive sentiments for the Dollar Index (DXY) which fell 0.9% against a basket of six top currencies, to 102.27. A weaker greenback aids the cause of the yellow metal.
“Dollar Index corrected by 0.62% and closed at a 2 week low that helped gold gain 1.03% on the MCX. Silver futures increased by 3.27%. The trend in bullion is expected to remain sideways over this week so we are advocating buy on dips strategy in Gold and silver futures,” Anuj Gupta, Vice President (VP), Commodity and Currency Research at IIFL Securities said.
He sees support in August Gold futures at Rs 58,400 and then Rs 57,800 while resistance at Rs 59,300 and then at Rs 59, 800. As for September Silver futures support is seen at Rs 69,500 – Rs 68,000 while resistance is at Rs 72,500 – Rs 74,000.
He expects Gold to test Rs 60,000 per 10 gram and Silver futures to test Rs 72,500 – Rs 73,000 levels “very soon again”. The August gold futures ended with gains of Rs 391 per 10 gram or 0.67% at Rs 58,792 on Friday while the September Silver futures finished up by Rs 1,009 per kg or 1.43% at Rs 71,333.
On the Comex, Gold futures ended at $1,930.50 per troy ounce on Friday, up by $15.10 or 0.79% while Silver futures closed at $23.285, higher by $0.395 or 1.730%. Gold futures on the MCX have gained by 0.98% or Rs 571 per 10 gram on the month-to-date basis, Gupta said. They were up by 6.84% or Rs 3,765 on the year-to-date basis as on Friday, July 7 on the closing price basis, he added. Meanwhile, Silver futures have gained nearly by Rs 1,280 or 1.83% in value terms in July while gaining by 2.73% or Rs 1,897 on the YTD basis, the IIFL analyst said.
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Price of physical gold in bullion markets in Delhi-NCR is around Rs 61200 per 10 gram while that of Silver is Rs 73,000 per kg, Gupta said.
Colin Shah, Managing Director of Kama Jewelry said that the advent of H2 2023 will bring cheers to the domestic gems & jewellery industry with the launch of the Gems & Jewellery Park at Mahape in Navi Mumbai. “This park will bring in Rs 40,000 crore worth of investments and generate 1.2 lakh Job as was announced by the Chief Minister of Maharashtra Eknath Shinde”.
Intraday Trading Strategy by Anuj Gupta
– Buy MCX August Gold futures at Rs 58,200-58,400 with a stop loss of Rs 57,800 and price target of Rs 59,300
– Buy MCX September Silver futures at Rs 70,000 with a stop loss of Rs 69,400 and price target of Rs 71,000.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)