Gold, silver still have room for upward move

Hyderabad: Gold price (XAU/USD) in international market marginally higher as it’s hovering at $2,337/oz. Yellow metal’s price staged a moderate recovery to $2,340 on Thursday. It recouped some of the losses incurred after a recent US Consumer Price Index (CPI) report showed inflation remaining persistently high. US Dollar is hovering at year-to-date (YTD) high of $105.30 as hopes in the market that the US Federal Reserve may postpone interest rate cuts due to ongoing inflation concerns.

“The overall trend in gold and silver remains positive, but prices may have become overextended, suggesting a potential cooling-off period in the rally.” Ravinder Kumar, Senior Research Analyst (Xommodities) at SMC Global Securities Ltd, told Bizz Buzz.

Bullion analysts forecast resistance at $2,365.76/2,389.83/2,411.30 levels, where it may attract sellers. And the support levels are predicted at $2,303.20/ 2,278.34/ 2,253.71. Further, 50-day EMA at $2,303 and 200-day EMA at $2,198 signal ongoing buying trend as the prices supported within an upward channel.

Spot gold and silver prices on Wednesday hit fresh lifetime high levels as the yellow metal breaching Rs72,000 per 10 grams level in New Delhi, on strong cues in the overseas markets. Similarly, silver prices climbed Rs200 to hit a record Rs84,700 per kg.

“In the daily chart of gold, a gravestone Doji formation is forming, suggesting the potential for price correction. If prices remain below Wednesday’s high of Rs71,739, there could be a selling opportunity. Additionally, there’s an update from China regarding gold.”

The US inflation data and Treasury yields have been influencing gold prices. Rising US Treasury yields are supported by higher-than-anticipated inflation figures and it kept pressure on gold prices.

However, the technical charts support bullish outlook on the yellow metal. Gold price is considered bullish above $2,327.66 level, and may attract correction if it falls below that level, observe analysts.

“The Shanghai Futures Exchange (SHFE) announced on Wednesday that it will impose trading limits on its gold and copper contracts, in response to sharp price rallies in both metals. The exchange has set the maximum intraday position opening volumes for gold at 2,800 lots and for copper at 2,000 lots. This change will take effect from April 12, which might contribute to a slight downside push in prices,” remarked Kumar.

The August delivery contract of gold on MCX also hit an intra-day high of Rs72,042/ 10 grams, while June contract was most traded on the commodity exchange as it rose by Rs 24 or 0.03% to Rs71,364/ 10 grams. Meanwhile, gold bounced to an all-time high of Rs71,709 per 10 grams in intra-day trade.