Yellow metal edges below, below Rs 46,450; Time to take positions?

Domestic gold traded in a tight range Friday, tracking a global benchmark as the dollar’s rise made the yellow metal less attractive to holders of other currencies. However, weakness in stocks has undermined investor risk appetite, holding back gold losses.

At 2:40 pm, the December MCX gold futures contract was at Rs 46,435 per 10 grams, down 0.2 percent, or Rs 86, below its previous close of Rs 46,521 per 10 grams.

Silver futures for December were up 192 rupees, or 0.3 percent, to 59,809 rupees per kilogram, up from their previous close at 59,617.0 rupees per kilogram.

Globally, gold prices declined, but managed to hold above key tech support at $ 1,750 an ounce and were on track for modest weekly gains amid fears over inflation and economic growth. Spot gold last traded 0.2 percent down to $ 1,754.2 an ounce, while US gold futures traded at $ 1,754.5 an ounce. Spot silver rose 0.1% to $ 22.2 an ounce.

On Friday, the rupee depreciated 12 pays to 74.35 per dollar. The dollar was holding close to its highest level in a year, which made gold more expensive in other currencies.

The Sensex and Nifty50 domestic stock indices closed lower for the fourth day in a row. The weakness of securities usually increases the attractiveness of precious metals as a safe haven. Stay tuned live here

“Gold witnessed a sharp closure of short positions as bargain hunters started buying after the chairman of the Federal Reserve Board mentioned that the US was still far from full employment,” said Sandeep Matta, founder of TRADEIT Investment Advisor.

According to him, this helped restore the key level of $ 1,750 per ounce, and also prevented the bears from climbing to the level of $ 1,700 per ounce.

Gold is often seen as a hedge against higher inflation, but a Fed rate hike would increase the opportunity cost of owning non-interest bearing gold.

Should you take positions?

Matta sees a buy zone above Rs 46,325 with a target of Rs 46,700-47,000 and a sell zone below Rs 46,300 with a target of Rs 46,100-45,900.

The anticipation of tougher US bond purchases is holding back new purchases, said Ravi Singh, vice president and head of research at ShareIndia.

Source link