Resistance for gold prices in Rs 51.8k -52k zone
Gold prices have fallen sharply in Indian markets by Rs 2,000 per 10 gram recently
image for illustrative purpose
Mumbai: Gold prices have fallen sharply in Indian markets by Rs 2,000 per 10 gram recently.
Of course, the fall by around 4 per cent in a day in the yellow metal was because of the rise in the Dollar index. On MCX, gold futures fell as much as Rs 2,000 to Rs 50,824 per 10 gram as a selloff in global gold price.
With new government is almost confirmed US and hopes of large stimulus measures slumps the gold price, US Treasury yields and a climb in the equities toward its all-time closing high, which weighed down gold prices. The dollar has also rebounded and investors are running to book profits.
The US 10-year bond yield has also risen to March highs reflecting optimism about the US economy and increased inflation expectations.
Also weighing on price is further progress on the vaccine front as the UK approved Moderna's mRNA Covid-19 vaccine for emergency use.
"Although the short-term moves remain choppy due to rising bond yields in the US on back of a smooth transition of power, higher future inflationary concerns might trigger a re-emergence of buying in the precious metal at lower levels," said Ravindra Rao, Vice President-head commodity research at Kotak Securities.
With the new government almost confirmed, US and hopes of large stimulus measures slumps the gold price, US Treasury yields and a climb in the equities toward its all-time closing high, which weighed down gold prices. The US Dollar has also rebounded and investors are running to book profits.
"The short-term range is Rs 52,000 to Rs 48,500 and its retracement zone at Rs 51,800 -52,000 is resistance," says Kshitij Purohit, lead commodities & currency at CapitalVia.
The downside momentum is strong enough to make Rs 48,600 to Rs 48,000 a reasonable target next week. On the daily chart, Rs 47,900 level is also 50 per cent Fibonacci levels and having good support at this price.
Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on 21 days moving average is Rs 50,090 and 52 days moving average is Rs 50,022 which reflects decelerating positive momentum. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) line generated a crossover sell signal.
