Gold prices near Rs 45,000 ahead of US Fed meet outcome; check short-term target of MCX gold

Gold prices in India were trading firm on Tuesday ahead of the US Federal Reserve meeting decision tomorrow. On MCX, gold April futures were trading Rs 63 or 0.14 per cent up at Rs 44,963 per 10 grams against the previous close of Rs 44900. While silver May futures were ruling at Rs 67,529 per kg, down Rs 140 or 0.21 per cent as compared to the previous close of Rs 67,669.00 per kg on the Multi Commodity Exchange. Globally, gold prices eased as investors turned to riskier assets on hopes of a quick economic recovery, while they awaited the outcome of a US Federal Reserve policy meeting. Spot gold was little changed at $1,732.32 per ounce, while US gold futures fell 0.05 per cent to $1,728.20 per ounce, according to Reuters.

From a record high of Rs 56,191 per 10 gram on MCX in August 2020, gold prices have plunged Rs 11,228 per 10 gram or 20 per cent. Anuj Gupta, Vice President – IIFL Securities, Commodity and Currency Research, said that uptrend may be seen in gold and silver prices. Traders can buy gold at Rs 44,800 with a stop loss of Rs 44,500 for the target of Rs 45,400. Safe-haven demand may increase over rising coronavirus cases globally. “Gold may test $1760 levels and silver may test again $28 levels soon,” Gupta added.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.2 per cent to 1,050.32 tonnes on Monday from 1,052.07 tonnes on Friday. COMEX gold was trading mixed near $1730/oz after half a per cent gain in the previous session. Gold is choppy as support from US stimulus and retreat in US bond yields from recent high is countered by general optimism about the US economy and continuing ETF outflows, says Ravindra Rao, VP- Head Commodity Research at Kotak Securities. He also added that gold may remain choppy ahead of the Fed decision however the general bias may be on the upside amid hopes that the Fed may maintain a dovish stance.

Hedge funds continue to dump gold as CFTC report shows money managers decreased their speculative gross long positions in Comex gold futures by 10,385 contracts to 96,223 and short positions rose by 6,145 contracts to 66,793, says Bhavik Patel, Senior Technical Research Analyst, Tradebulls Securities. Gold’s net length is at its lowest point since May 2019 and such low net long positions do reduce the risk of a further slide in prices as weak hands are already out of the market. “Signs are coming that gold has found a bottom after a streak of successive weekly loss. In Comex, gold is unable to break $1680. ETF outflows are also starting to stabilize as Friday saw outflows of only 1.6 tons, the lowest daily figure in four weeks. “We believe in the short term we may see some attempt by bulls to take gold above $1750. In MCX, we are expecting prices of Rs 45,500 this week and any fresh selling will only come below Rs 44,000,” Patel said.