Gold and silver futures market update
Gold August futures opened lower by 0.72%, or Rs 534, at Rs 73,621 per 10 grams on Friday, while silver September futures contracts opened down by nearly 1%, or Rs 90,953 per kilogram. The yellow metal has traded flat, gaining only Rs 340 per 10 grams in the last week, while silver has dipped by Rs 2,100 per kilogram in the same period.
Outlook on gold and silver prices
Gold is currently seeing some profit-taking, but things look positive in the medium-term amid political uncertainty and as rate cuts approach. The latest decline in gold prices marks the longest streak of daily drops since May. Despite this, gold is poised for its fourth consecutive weekly gain, boosted by expectations of forthcoming monetary easing by the Federal Reserve.
Insight on international markets and macroeconomic factors
Gold and silver prices extended their downward trend in international markets following the IMF executive board’s recommendation for the US to postpone interest rate cuts until late 2024. Additionally, the IMF proposed higher tax rates to offset the increasing debts of the Federal Reserve. The rise in US jobless claims also supports forecasts of a Fed rate cut in September.
Factors driving gold prices in 2021
Gold remains nearly 20% higher for the year, driven by central bank purchases, strong demand in China, and its role as a safe-haven asset amid geopolitical tensions. On Friday, the US Dollar Index, DXY, was hovering near the 104.23 mark, falling by 0.05%.
Technical analysis and trading strategy
Neha Qureshi, Senior Technical & Derivative Analyst at Anand Rathi Commodities & Currencies, shared her insights on the technical aspects of the gold and silver futures market. According to Qureshi, MCX Gold August futures are showing bearish sentiment with key resistance levels at 74,731 and 75,200, and support levels at 73,530 and 73,068.
Intraday trading strategy by Neha Qureshi
Qureshi recommends selling MCX August gold futures at Rs 74,100, with a stop loss at Rs 74,800 and a price target of Rs 73,000. She also suggests selling MCX September silver futures at Rs 92,000, with a stop loss of Rs 93,000 and a price target of Rs 90,000.
Additional Insight:
Investors should closely monitor geopolitical developments, central bank policies, and economic indicators to gauge the potential direction of gold and silver prices. The ongoing uncertainty surrounding interest rate cuts and fiscal policies will likely continue to influence the precious metals market in the coming weeks. Traders should remain agile and adapt their strategies to capitalize on market fluctuations and opportunities for profit.
