Despite some profit-taking in Monday’s session, gold prices gained Rs 1,500 per 10 grams while silver gained Rs 6,000 per kilogram in the past week.
In international markets, gold prices remained stable on Tuesday, hovering near the record highs reached in the previous session, as markets anticipate the start of a easing cycle in the United States, with expectations that it could begin with a massive rate cut.
At 0020 GMT, spot gold was trading steady at $2,582.84 an ounce. Bullion hit an all-time high of $2,589.59 on Monday. U.S. gold futures were also steady at $2,609.90.
Gold has gained more than 20% this year, supported by growing confidence that the U.S. central bank is on the verge of cutting interest rates for the first time since 2020. Strong over-the-counter buying and strong safe-haven demand amid conflicts in the Middle East and Ukraine also helped the advance.
All attention will now turn to the US Federal Reserve this week, where it is expected to announce at least a 25 basis point cut to interest rates at the conclusion of its September policy meeting on Wednesday. “Opinions are divided on whether the Fed will cut rates by 0.25% or 0.5%, but lower rates generally support gold, which pays no interest but becomes more attractive in a low rate environment,” said Neha Qureshi, senior technical and derivatives analyst at Anand Rathi Commodities & Currencies. Today, the US dollar index, DXY, was hovering around the 103.22 mark, down 1.20 or 0.15%.
“The upcoming US presidential election adds political pressure as some senators call for aggressive rate cuts to protect the economy. Gold has already gained more than 25% this year on expectations of rate cuts, central bank buying, geopolitical tensions and increased interest from retail investors,” Qureshi added.
Qureshi said that on the daily chart, October MCX Gold futures are trading above an ascending trend line, forming a pattern of higher highs and higher lows, indicating bullish momentum. The price is also trading above the 21-day EMA, indicating strong bullish momentum. The RSI is showing a positive divergence, reinforcing the bullish outlook. The key resistance levels are at 73,950 and 74,440, while support levels are at 73,080 and 72,600.
Neha Qureshi Intraday Trading Strategy:
- Buy MCX October Gold Futures at Rs 73,500 with a stop loss of Rs 73,000 and target price of Rs 74,200.
- Buy MCX December Silver Futures at Rs 89,600 with a stop loss of Rs 88,600 and target price of Rs 91,600.
(Disclaimer: The recommendations, suggestions, views and opinions of the experts are their own and do not represent the views of The Economic Times)
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