Indian Gold December Futures rose in early trade on November 21 supported by concerns that US bills on Hong Kong could increase tensions between the US and China.
Completion of a “phase one” trade deal could slide into next year, Reuters said quoting trade experts and people close to the White House.
Gold December futures rose 0.04 percent at Rs 38,171 per 10 gram at 09:20 hours.
“Gold prices trade volatile on the early morning of Thursday as a fresh spar between the United States and China over US bills on Hong Kong ignited worries that trade talks could hit a hurdle and delay an interim deal,” Jateen Trivedi, Sr. Research Analyst – Commodity & Currency at LKP Securities Ltd told Moneycontrol.
“Gold prices scaled up on Wednesday on sensitive worries that a Sino-US trade deal could hit a hurdle as the US Senate passed a bill to back up Hong Kong anti-government activists,” he said.
Gold and Silver prices recovered from day’s low on Wednesday in the late evening session after news that US-China first phase trade deal will not be completed this year.
Gold is holding above key support of $1466 and Silver also holding its support of $17 per troy ounce. At MCX, Gold prices hold Rs 38,000 and Silver holds above Rs 44,400 levels.
We expect both the precious metals i.e. Gold and Silver to show strength on Thursday. Gold can be bought around Rs 38,050, for a target of Rs 38,330 while a stop loss could be placed below Rs 37,920.
Silver can also be bought around Rs 44,500 for a target of Rs 44,900, and a stop loss could be placed below Rs 44,300.
MCX Gold December has been failing to sustain at higher levels near 38300 levels and reversed on the downside towards 38050 levels. This has been keeping prices in a range.
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International Gold has formed Bearish candlestick pattern in the last session which indicates fall from hereon is possible. We can expect Gold to trade in the range of 37800 and 38150 levels.
Day Trading Strategy: MCX Gold December Sell in the range of 38150—-38250 with 38411 as stop loss and target of 37980—-37730 levels.
On the daily chart, Gold traded flat on Wednesday waiting for triggers. Prices have been trading flat for a week. The ATR has significantly dropped from 500+ in Sep19 to below 400 showing signs of less of trending, and more of a news based reaction market for more than a month now.
Prices keep trading near 20-Days EMA placed at Rs 38070 and is holding 100-Days EMA placed at 37,398 but majorly trading in the range of 37500—-38400.
For the day, on the upside 38300-38650 shall act as a supply zone, and 38100-37900 is likely to act as a support.
Gold prices remained weak in India today, tracking muted global cues. On MCX, prices of gold futures contracts were down 0.51% to 37,960, extending losses to the third day. Tracking gold, silver also fell, with prices on MCX down 0.36% to ₹44,657 per kg. In global markets gold prices fell today to 1468.6 an ounce after a news report, citing sources, said that China has invited top U.S. negotiators for a new round of face-to-face talks.
Gold prices had hit a two-week high of $1,478.80 in the earlier session on concerns that US-China trade deal could get delayed after US lawmakers passed legislation supporting Hong Kong protesters, which Beijing condemned. The main driver in gold currently is the uncertainty about the trade deal and the market is in a wait-and-see mode, says an analyst.
Abhishek Bansal, chairman of ABans Group of Companies, said gold prices have come off recent lows after US President Donald Trump threatened to raise tariffs on Chinese imports if no deal is reached with China.
Also, helping gold is the rise in geopolitical tensions, after a bill was passed in the US to support the Hong Kong protesters, which might derail the progress in the trade talks, he added.
However, weighing on gold price also is weaker investor interest and Fed’s pause in interest rate cuts, Kotak Securities said in a recent note.
Gold holdings with SPDR ETF, the world’s biggest gold-backed exchange traded fund, were unchanged at 891.79 tonnes on Tuesday, the lowest since September, says the note. Gold faces resistance at $1480/ounce and unless this key level is broken upside could be limited, say analysts.
The months long trade dispute has pushed gold, which is considered a safe asset in times of political and economic uncertainty, about 14% higher this year in global markets. In India, prices are up over 20%, also lifted by import duty hike and rupee’s depreciation against US dollar.
Lower global equity markets and a tad weaker dollar index also supported gold.
Minutes from the US Federal Reserve’s October policy meeting, released on Wednesday, offered little cues on what would cause policymakers to change their minds on the interest rate outlook. The Fed has cut interest rates three times this year, before signaling a pause.
Lower interest rates reduce the opportunity cost for holding the non-yielding gold.
Silver tracked rangebound movement in gold and mixed trade in industrial metals, says Kotak Securities. Mixed cues from US and China on trade front has caused choppiness in commodities at large and this trend may persist unless there is more clarity, it added.
