Gold fell in Friday’s early trade despite a lower-than-estimated print on the US inflation numbers released on Thursday. The yellow metal was trading down on the back of a stronger dollar index (DXY) and bond yields. The DXY was trading with a positive bias at 102.59 against a basket of six top currencies.
Tracking cues from their foreign peers, both gold and silver futures ended with declines in the previous session. While the former ended Rs 118 per 10 grams lower, the latter was down Rs 27 per kg.
The October gold futures were trading with losses at Rs 58,800 per 10 grams on the MCX in the opening trade, down Rs 53 or 0.09%. Meanwhile, September Silver futures were trading at Rs 70,014, up Rs 33 or 0.05%. Click to know more
On the Comex, Gold futures were trading at $1,947 per troy ounce on Friday, down $1.90 or 0.10% while Silver futures were trading at $22.805, down $0.016 or 0.70%.
“The US July CPI inflation report showed that US Core CPI posted the smallest back-to-back rise in two years. Core CPI inflation rose 0.20% m–o-m for a second month. Headline CPI inflation also rose 0.20%. The US treasuries initially rallied as worse-than-expected jobless claims and Inflation data eased concerns about a Fed rate hike in September ( current probability 10%) however, they eventually fell on the notion that headline inflation will rise again in August due to high crude oil prices, though core may not be impacted much,” Praveen Singh – Associate Vice President, Fundamental Currencies and Commodities at Sharekhan said.
He said that rise in yields and the firm dollar are bearish for the yellow metal while putting support at $1,900-$1,890 and resistance at $1,930/$1,950.
October Gold recently broke below its upward trendline support at Rs 58,945 on the daily timeframe, signaling bearishness, Neha Qureshi, Senior Technical & Derivative Analyst, Anand Rathi Commodities & Currencies said.
“The MACD momentum indicator displayed a negative crossover, indicating a bearish sentiment. Furthermore, the RSI showed a negative divergence, suggesting a potential downward movement. Support levels are anticipated at 58,400 and 57,700, with expected resistance at 59,394 and 59,700,” Qureshi said.
Intraday Trading Strategy by Neha Qureshi
– Sell MCX October Gold futures at Rs 58,950 with a stop loss of Rs 59,200 and a price target of Rs 58,450.
– Sell MCX September Silver futures at Rs 70,100 with a stop loss of Rs 71,200 and a price target of Rs 68,200.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)