The MCX Gold June futures fell below 50,000 on Wednesday amid a US Treasury yield rise as the dollar extended its fall to a fourth day, bouncing back from a recent two-decade high against a basket of key peers. On the Multi Commodity Exchange, the precious metal fell to a low of Rs 49,863 per 10 grams in the first trade on Wednesday.
According to experts, the fall in the price of bullion is behind the increase in yields in the US treasury. They believe that gold is being traded in the oversold zone on the technical chart and is expected to be sideways traded this week.
Robi Singh, vice-president and head of research-India, said the weakening economic data from China has raised concerns about the prospect of a global recession, with the focus on the global economy, the dollar index weakening and gold prices soaring.
“However, US Treasury yields have risen, limiting demand for gold. Gold prices may be on the sidelines this week,” the expert said.
According to Ravi Singh, the purchase zone is above Rs 50,250. Once the yellow metal reaches this level, investors will be able to buy it for Rs 50,500 per 10 grams. Sales area is below 50m000 and target 49800, experts said.
Meanwhile, Amit Khare, AVP-Research Commodities, Ganganagar Commodities Limited, said gold and silver prices were slightly higher in US trading on Tuesday afternoon and lost strong initial gains after some strong-expected US economic data and yields on US bonds.
Meanwhile, the US dollar index is down. The yield on 10-year U.S. Treasury notes is found to be around 2.9%, he said.
Gold and silver showed some mixed movement in the May 17 trading session. On the Multi-Commodity Exchange (MCX), the June gold contract fell 0.15% to close at Rs 50,173 per 10 grams. Silver futures for July delivery rose 0.38% to close at Rs 61,156 per kg.
“Gold and silver are trading in the oversold zone as per the technical chart. We will see a huge short covering rally in the near future. He advised traders to create a new buying position near the level of support given. Traders should focus on the following important technical levels for the day:
June Gold closing price 50173
Support 1 – 49900, support 2 – 49700; Resistance 1 – 50300, Resistance 2 – 50500.
July Silver Closing Price 61156
Support 1 – 60750, support 2 – 60200; Resistance 1 – 61400, Resistance 2 – 61800.
Gold prices fell on Wednesday as the dollar recovered slightly, strong Treasury yields and an aggressive inflationary position by the US Federal Reserve chief, as well as pressure on the greenback-priced bullion, Reuters reported.
Spot gold fell 0.2% to 1,810.49 per ounce, by 0557 GMT. U.S. gold futures fell 0.6% to $ 1,808.10, it reported