Gold price today: Yellow metal gains as US-China tensions dent sentiment

India Gold June futures rose on May 4 tracking positive trends in the international Gold prices as risk sentiment was weakened by rising U.S.-China tensions over the coronavirus.

The dollar rose, oil fell and stock markets were poised to slip as rising U.S.-China tensions over the coronavirus – and growing unease at the gulf between asset prices and grim economic reality - turned investors cautious, said a Reuters report.

“U.S. Secretary of State Mike Pompeo said on Sunday there was "a significant amount of evidence" that the new coronavirus emerged from a Chinese laboratory, but did not dispute U.S. intelligence agencies' conclusion that it was not man-made,” it said.

Gold and silver prices which corrected by around 2 percent last week in the international as well as domestic market could see some bounce back but will remain vulnerable to profit booking at higher levels.

“US consumer confidence, Richmond manufacturing index, unemployment claims, and advanced quarterly GDP number comes below expectations. But some support is seen in both the precious metals at lower levels in weekend session after a statement of US President Donald Trump to impose new tariffs on China,” Manoj Jain, an independent market expert told Moneycontrol.

“We expect both the precious metals remain volatile this week and lower level buying is expected. Gold is expected to hold 45,250 levels and if prices sustain above 45800 could extend the rally towards 46300 levels again,” he said.

Jain further added that if price falls and sustains below 45250, it could lead to weakness, and in that case, India Gold could test 44,800 levels again.

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Trading Strategy:

Expert: Sriram Iyer, Senior Research Analyst from Reliance Securities

International bullion prices have started flat this Monday morning in Asian trade. Risk sentiment remained weak amid rising U.S.-China tensions over the coronavirus.

Technically, the LBMA Gold spot took the support of a rising trendline near $1670 & recover almost $30 above $1700. However $1725 will act as resistance and $1688 will hold support in the coming session and prices could trade within the ranges.

MCX Gold June has bounced back from 44750 levels up to 45600 levels indicating some recovery from lower levels. However, prices are likely to trade on Bearish note as 45700-45800 levels hold a resistance zone where downside 44850 will act as support.

Expert: Hareesh V, Head Commodity Research at Geojit Financial Services

Gold continues to rise on escalating tension between the U.S – China over coronavirus, fears of global economic recession, and hopes of more economic easing measures from central banks.

Meanwhile, chances of easing coronavirus restrictions in many countries and a strong U.S dollar may restrict major gains in the commodity.

Technical Outlook (London spot):

As long as prices stay above $1665 expect to continue the bullish outlook in the counter. An unexpected drop below the same would be an early signal of selling pressure for the day.