Gold prices cool off after 3-day record run. Should you cash in or double down?
Meanwhile, silver December futures contracts on MCX experienced an even sharper decline to open at Rs 1,42,500/kg, which was lower by Rs 2,220 or 1.5%.
In the international market, gold prices held steady on Friday and were set for a seventh straight weekly gain, buoyed by expectations of further U.S. interest rate cuts this year and worries over the impact of a U.S. government shutdown.
Spot gold was little changed at $3,851.99 per ounce, as of 0247 GMT, after hitting an all-time high of $3,896.49 on Thursday. Bullion has risen 2.4% so far this week.
The U.S. government shutdown extended to a second day on Thursday, potentially delaying key economic data releases, including the closely watched non-farm payrolls report due on Friday.
However, recent U.S. economic data have lifted expectations for further rate cuts this year, with traders pricing in a near-certain 25 basis-point reduction this month, according to CME Group’s FedWatch tool.In the previous trading session, gold and silver settled on a positive note in the domestic market and on a weaker note in the international markets. Gold December futures contract settled at Rs 1,17,588 per 10 grams with a gain of 0.28% and silver December futures contract settled at Rs 1,44,720 per kilogram with a gain of 1.81%.Gold and silver show very high price volatility in the international markets and see profit taking from record-high levels ahead of the U.S. non-farm employment data. Gold and silver prices also plunged amid weakness in crude oil prices.
“Expectations of an increase of U.S. non-farm employment by 30,000 to 52,000 are triggering profit taking in gold and silver prices,” said Manoj Kumar Jain of Prithvifinmart Commodity Research.
However, Jain stated that there is no change in the major long-term fundamentals of gold and silver and both precious metals continue to hold their key support levels, and a buy-on-dips strategy could continue to work from a longer-term perspective.
Weakness in the rupee is further supporting prices in the domestic markets. Today, the US Dollar Index, DXY, was hovering near the 97.89 mark, gaining 0.04%.
“We expect gold and silver prices to remain volatile in today’s session amid volatility in the dollar index, volatility in the global financial markets and ahead of the U.S. non-farm employment data and gold are expected to trade in the range of $3,820-3,920 per troy ounce and silver is expected to trade in the range of $45.50-47.40 per troy ounce in today’s session,” he added.
How to trade gold?
Manoj Kumar Jain suggested the following ranges for gold and silver on MCX:
- Gold has support at Rs 1,16,200-1,15,550 and resistance at Rs 1,18,000-1,18,800
- Silver has support at Rs 1,41,400-1,39,800 and resistance at Rs 1,45,000-1,46,600
Jain suggests buying gold on dips around Rs 1,16,200 with a stop loss of Rs 1,14,800 for a target of Rs 1,18,800.
Gold rates in physical markets
Gold Price today in Delhi
Standard gold (22 carat) prices in Delhi stand at Rs 88,112/8 grams while pure gold (24 carat) prices stand at Rs 94,648/8 grams.
Gold Price today in Mumbai
Standard gold (22 carat) prices in Mumbai stand at Rs 87,528/8 grams while pure gold (24 carat) prices stand at Rs 94,040/8 grams.
Gold Price today in Chennai
Standard gold (22 carat) prices in Chennai stand at Rs 87,168/8 grams while pure gold (24 carat) prices stand at Rs 93,728/8 grams.
Gold Price today in Hyderabad
Standard gold (22 carat) prices in Hyderabad stand at Rs 87,008/8 grams while pure gold (24 carat) prices stand at Rs 93,480/8 grams.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)