Gold prices today fall below Rs 47,200, can plunge to Rs 45,000, say analysts

NEW DELHI: Gold and silver futures prices continued their decline on Monday as improving economic activity lifted the risk appetite, resulting in flow of funds from precious metals that are considered safe havens.

The drop is despite the US dollar falling from an over two-month peak on Friday after a US jobs report indicated a slow recovery from the impacts of the Covid-19 pandemic. A weaker dollar makes gold cheaper for holders of other currencies.

Gold futures on MCX were down 0.14 per cent or Rs 67 at Rs 47,189 per 10 grams. Silver futures dropped 0.31 per cent or Rs 212 to Rs 68,526 per kg.

“Gold recovered from recent lows as the US dollar index shed some of its recent gains. Also supporting price is increased expectations of US stimulus measures as well as mixed US jobs report. However, weighing on price is weaker investor interest as is evident from ETF outflows and surge in US bond yields,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

In the spot market, falling for the fifth consecutive day, gold prices on Friday declined Rs 163 to Rs 46,738 per 10 gram in the national capital amid rupee appreciation. Silver, however, gained Rs 530 to Rs 67,483 per kg.


Trading strategy
“We expect gold prices to trade sideways. MCX Gold April futures support lies at Rs 46,900 and resistance at Rs 47,500 per 10 gram,” said Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

NS Ramaswamy, Head of Commodities, Ventura Securities, advises to sell MCX Gold (April) below Rs 46,500 for the target of Rs 45,000 with stop loss above Rs 47,200.

Global markets
Gold prices edged higher on Monday, as weaker-than-expected US jobs data re-ignited concerns over a recovery in the world's largest economy, pressuring the dollar and boosting bullion's appeal.

Spot gold rose 0.1 per cent to $1,813.99 per ounce by 0040 GMT. US gold futures gained 0.2 per cent to $1,816.50.

Physical gold demand picked up in China last week ahead of the Lunar New Year festival, while Indian retail buyers cheered a sharp dip in domestic rates. Spot silver gained 1.1 per cent to $27.12 an ounce, platinum rose 0.7 per cent to $1,130.91 and palladium was steady at $2,336.29.