Gold prices rallied on Friday led by weakness in the greenback and lower bond yields as investors fixed their eyes on the US March inflation numbers. The dollar index dipped 0.5%, making gold more attractive for overseas buyers, while benchmark 10-year treasury yields.
On MCX, April gold futures were trading at Rs 59,930 per 10 grams in the early trade, up Rs 35 or 0.06%. The Gold futures built on the gains from the previous closing of Rs 59,860.
Meanwhile, May silver futures were trading at Rs 71,986, up Rs 212 or 0.30% around 9:15 am.
On Comex, gold futures were trading at $1,999 per troy ounce around this time and were up by $1.30 or 0.07% while silver futures were higher by $0.066 troy pounce or 0.28% and trading at $24.055.
“The gold rallied dramatically on Thursday, rising with 0.80% daily gain, and reversed the previous weekly loss ahead of the key inflation data from the United States and Eurozone. The XAUUSD found demand during American trading hours, touching the weekly high of $1984 mark,” Marc Despallieres, Chief Strategy and Trading Officer at Vantage said.
XAUUSD is a symbol that indicates how many US dollars a trader would require to buy an ounce of gold.
“Much of this rally continues to be a short covering rally,” Reuters reported quoting Bart Melek, head of commodity strategies at TD Securities. “The catalyst here is the continued expectations that rates in the U.S. will top out,” he added.Intraday Trading Strategy by Anuj Gupta
- Buy MCX April Gold futures at Rs 59,100 with a stop loss of Rs 58,850 and price target of Rs 59,600
- BUY MCX May Silver futures at Rs 71,400 with a stop loss of Rs 70,850 and price target of Rs 72,500
Triggers
A weaker dollar makes dollar-priced commodities more appealing to holders of other currencies, neutralising some of the impact of the bullion uptrend.
“It being the last day of the year, possibly some dollar sales towards the end of the day could be seen,” Anil Kumar Bhansali, Head of Treasury at Finrex Treasury Advisors LLP said. He sees the rupee trading in a range of 82-82.50 with a slight possibility of it breaking below 82 against the dollar.
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