Geo-political tensions have built the risk premium in the market, if we see any development in the same that could further add gains for both Gold and Silver, said Manav Modi, Analyst, Commodity and Currency at Motilal Oswal Financial Services.
Gold price fell 0.5% for June expiry on opening at MCX. The yellow metal opened at Rs 69,297 per 10 grams, compared to the previous close of Rs 69,707 per 10 grams. Also, the precious metal’s spot price was quoted below the $2,300 level in the international market. On April 04, gold and silver climbed to a lifetime high in the domestic market. The investors said that the strong US Dollar hit the precious metals. From here, the market participants will keep a hawk eye on the US non-farm payroll data.
The US nonfarm payroll report for March to be released on April 05 will be crucial for the yellow metal. A robust report will weigh on the metal as it is looking somewhat over-bought in the near term, though prospects remain positive for medium to long-term horizons. “However, geopolitical tensions are resurfacing, which may limit the downside,” said Praveen Singh, Associate Vice President of Fundamental Currencies and Commodities at Sharekhan by BNP Paribas.
Singh said that support for the gold is in the range of $2250 to $2200, whereas resistance comes in at $2350 to $2360.
Another analyst, Bhavik Patel, Commodity and Currency analyst at Tradebull Securities said that gold is looking extremely overbought, and expectations are that it will see a pullback soon as traders take profit. But one has to remember that a small correction is not going to mean the end of the bullish trend but a much-needed pullback for gold to sustain at higher levels.
“Historically we have seen that whenever gold reaches such overheated levels (RSI_14 above 82) we have seen correction in the range of 3-5%. So clearly fresh new long positions should be avoided and any long positions should either be booked profit or stoploss should be trailed to the buying price. According to the Fibonacci extension, the next target for gold in MCX comes around 71150 and 71850 while strong support comes at around 67000, said Patel.
Gold has support at $2252 to $2234 levels, while resistance is at $2288 to $2305. Silver has support at $26.20 to $25.98 while resistance is at $26.65-26.82, said Rahul Kalantri, Vice President of Commodities at Mehta Equities.
Source:financialexpress.com