Gold Rate Today: Yellow metal shines amid dovish Fed as dollar index hits 11-week lows. What should traders do?
Gold traded with minor losses on Wednesday in the early trade after crossing the $2,000 mark on Tuesday. The strength in the yellow metal is owing to the weakness in the dollar index (DXY) which is currently trading at 11 week’s low.
Taking cues from the international prices, MCX December gold futures opened in the red and were trading at Rs 61,139 per 10 gram, down by Rs 86 or 0.14% from the Tuesday closing price. Meanwhile, the December Silver futures were trading at Rs 73,085 per kg, lower by Rs 219 or 0.30%.
On Comex, gold futures were trading at $1,997.90 per troy ounce on Wednesday, down by $3.70 or 0.18% while silver futures were trading at $23.790, lower by 0.079 or 0.330%.
The dollar index was trading flat at 103.55 against a basket of top six currencies, though the bias was negative.
“Gold ended on a positive note on Tuesday gaining by 0.94% and closing above Rs 61,225 levels. It was on account of weakness in the dollar with the Dollar index trading at 11 week’s low level and expectations are that it may go down further as FOMC is not keen to increase rates any more,” said Anuj Gupta, Head Commodity & Currency, HDFC Securities.
Gupta sees Comex gold trading between $1,985 and $2,010 levels while at Rs 61,000-61,800 on the MCX. As for silver futures, the December contract is likely to trade between 72,500 and 74,500 levels. As the trend remains positive in his view, the advice is to buy gold and silver on dips.
Gold futures on the MCX have gained by 0.84% or Rs 512 per 10 gram on the month-to-date basis, Gupta informed. They were up by 11.28% or Rs 6,208 on the year-to-date basis as on Tuesday, November 21 on the closing price basis. Meanwhile, silver futures have gained nearly Rs 1,635 or 2.28% in value terms in November while gaining by 5.61% or Rs 3,892 on the YTD basis, the commodity and currency analyst said.
Gold is currently up 3% since last week due to lower treasury yields and a weakened dollar, Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies said.
Qureshi said that the gold December contract has formed a hammer candlestick pattern followed by bullish engulfing indicating bullishness in the market on the daily charts.
Moreover, it is trading above its 50-day and 100-day Exponential Moving Average (EMA) while the Relative Strength Index (RSI) is also forming a positive divergence, indicating a bullish sentiment, she added.
The Anand Rathi analyst sees resistance at Rs 61,500-61,900 while support levels at Rs 60,800-60,300.
Price of gold in major physical bullion markets like Delhi, Ahmedabad and other cities is Rs 62,000 per 10 gram while those of 1 kg of Silver is Rs 75,300.
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Qureshi and Gupta took a diverse trading strategy for today.
Intraday Trading Strategy by Anuj Gupta
– Sell MCX December Gold futures at Rs 61,300 with a stop loss of Rs 61500 and price target of Rs 60,980.
– Sell MCX September Silver futures at Rs 73,200 with a stop loss of Rs 74,000 and price target of Rs 72,080.
Intraday Trading Strategy by Neha Qureshi
– Buy MCX December Gold futures at Rs 61,200 with a stop loss of Rs 60,800 and a price target of Rs 61,800.
– Buy MCX December Silver futures at Rs 73,300 with a stop loss of Rs 72,300 and a price target of Rs 75,300
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)