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Gold futures edge higher, silver touches Rs 63,655 per kg mark. Demand surges and prices likely to go up.
People world over and particularly Asians have a tendency to fall back upon the standard asset namely yellow metal in times of crisis. For them that is the only tangible and ever lasting and valuable asset on which they can bank upon. Indians are indeed crazy over this metal for long and rightly so, the same comes to the rescue in times of exigencies and dire needs. The price of gold has been accelerating at a high pace over the years and still people throng the metal shops incessantly. The price of Gold becomes highly volatile in times of war and global distress. Hence a small percentage of assets say 20 % could possibly be parked in Gold and silver as an asset for long term for the family.
Analysts expect gold and silver prices to remain volatile in the near term but continue to hold their support levels.
Domestic gold futures edged higher on Tuesday as the global benchmark rate held steady near a one-week high amid safe-haven demand on rising cases of the Delta variant of the coronavirus. However, a firmer dollar — which makes the precious metals more expensive for holders of other currencies — kept the upside in check.
On MCX, gold futures (October 5) traded marginally higher at Rs 47,237 in early deals. Silver futures (September 3) gained by as much as Rs 198 to Rs 63,655.
Globally, spot gold was last seen trading almost flat at $1,787.90 per ounce, having touched its highest level recorded since August 6 the previous day. US gold futures eased 0.1 percent to $1,788.40 per ounce.
“We expect both the precious metals to remain volatile but continue to hold their support levels, and any decline would be an opportunity for buying at lower levels,” said said an Observer. Gold has support at $1,774-1,762 per troy ounce and resistance at $1,800-1,814 per ounce, he said. On MCX, he pegged support for the yellow metal at Rs 47,000-46,800, and resistance at Rs 47,330-47,580.
The dollar index — which gauges the greenback against six rivals — rose as much as 0.11 percent.
Analysts say market participants are weighing the vaccine drives against the number of Covid-19 cases. All eyes are now on the minutes of the Federal Reserve’s last scheduled review due for release on Wednesday for cues.
Meanwhile, the financial markets also monitored turmoil in Afghanistan after the Taliban seized the capital and the State as a whole.
On Monday, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.1 percent to 1,020.63 tons.
How to trade in gold now
Experts suggest buying gold on dips around Rs 47,050 for a target price of Rs 47,500 with a stop loss at Rs 46,800. For silver, they recommend going long around Rs 63,000 for a target of Rs 64,400 with a stop loss at Rs 62,400.
Investors are advised to make their judgements while taking positions without the bias of the news around.
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