Gold price 13-Apr-2020: Yellow metal rises nearly 1%; buy on dips

Experts feel that the precious metal is likely to remain volatile in the week but investors should maintain a buy on dips approach while support is placed at Rs 44,555 per 10 gm.

GOLD-JEWELSIndia Gold June futures rose nearly 1 percent on April 13 as worries over coronavirus-driven steeper global economic downturn fuelled safe-haven buying.

Experts feel that the precious metal is likely to remain volatile in the week but investors should maintain a ‘buy on dips’ approach while support is placed at Rs 44,555 per 10 gm.

On the Multi Commodity Exchange (MCX), June gold contracts were trading higher by 0.82 percent to Rs 45,665 per 10 gram at 09:30 hours. Silver futures rose 0.48 percent to Rs 43,711 per kg.

Gold and silver prices showed strength last week. Gold gained around 2.25 percent and silver outperform gold last week and gained around 5.50 percent.

“Gold gives technical breakout on the weekly chart and closed above 44555 last week. Due to fresh relief package of 2.3 trillion dollars announced by U.S. Federal Reserve and negative global growth outlook for FY 2020-21 by Goldman Sachs triggered a safe-haven buying once again in both the precious metals,” Manoj Jain, an independent market expert told Moneycontrol.

“Weakness in rupee additionally supports both the precious metals in the domestic market. We expect gold prices remain firm this week and gold Prices are expected to test 45800-46500 levels. 44555 act as a major support for gold,” he said.

Trading Strategy:

Expert: Sriram Iyer, Senior Research Analyst from Reliance Securities

International Gold spot is trading near its recent top of $1,700, indicating an upside momentum up to $1,709-$1,725 levels. However, downside immediate support is at $1,671-$1,660 levels.

MCX Gold is trending towards its all-time high levels of 45,700 into uncharted territory indicating prices have shifted to a new price zone. It held on to support near 44,980-44,670 levels.

Strategy for Gold: Buy Gold June 45,300-45,320, with a stop loss of 45,100, and a target of 45,700.

Expert: Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

COMEX gold has slipped over 1 percent to trade near $1730/oz amid some profit-taking after a rally to 2012 highs in the previous session. Stability in the US dollar index has pressurised gold price.

However, supporting price is increasing virus cases globally, more stimulus measures taken by the Fed and other governments and continuing ETF inflows.

Gold has given a close above $1700/oz and with increasing virus risks, general bias may be on the upside.

Expert: Prathamesh Mallya, Non-Agri Commodities and Currencies, Angel Broking Ltd.

In the coming days, gold prices will continue to be affected by the impact of stimulus packages announced by different governments across the world.

The US has already announced a stimulus package worth $2 trillion to support the country’s economy that has been affected by the COVID-19 pandemic.

Eurozone and Japan have also announced an infusion of half a trillion Euros each to bring their economies back on track.

Expert: Hareesh V, Head Commodity Research at Geojit Financial Services

Large scale quantitative easing measures taken by various central banks have lifted gold higher. Investors’ demand for safe havens due to fears of a global recession amid the negative economic impact of COVID 19 will also support the yellow metal. At the same time, moderate physical activities and a strong dollar may limit major gains.

Technical Outlook (London spot):

The bullish momentum may continue as long as prices stay above $1,642. Intraday resistance is seen at $1,695, a direct break above the same would lift prices higher to $1,705 or even more towards $1,740 levels. The immediate downside turnaround point is seen at $1,620.

Source: Moneycontrol