Gold Price Today: Yellow metal on sticky wicket; analyst recommends sell on rise

US Federal Reserve Chair Jerome Powell’s comments, hinting of further rate hikes during his testimony before US Senate Banking Committee, spooked the equity and commodity markets as frontline equity indices crashed in Tuesday’s trade on Wall Street. Key commodities such as gold and silver fell sharply as well.

A similar rout was witnessed on MCX as well, where gold and silver futures declined. MCX was shut for trading in the morning session on account of Holi.

The April gold futures settled at Rs 55,012, lower by Rs 757 or 1.36% from last Friday’s closing price while the April May silver futures fell over 3.32% or Rs 2,139 on Tuesday and ended at Rs 62,210.

Commodity and currency expert Anuj Gupta said that the pressure is likely to sustain on bullion in the near term. Gupta, who is Vice President (VP), Commodity and Currency Research at IIFL Securities said that Dollar Index (DXY) could strengthen from here which will dampen the appeal of gold and silver.

He sees Dollar Index testing levels of 107 against the basket of six major currencies. The price of gold and silver is inversely related to the movement in DXY.

But the impact could be temporary, he further said.His strategy for today is one of sell on rise. Investors and traders can look to sell MCX April Gold futures at Rs 55,250 with a stop loss of Rs 55,500 and target of Rs 54,800.

Selling is advised in May silver futures at Rs 62,700 with a stop loss of Rs 63,300 and target of Rs 61,500.

He also advises a sell on March copper futures at Rs 751 per kg with a stop loss of Rs 757 and price target of Rs 740. The March futures were trading at Rs 746 around this time and were up by Rs 1.45 or 0.19%.

He expects volumes to remain low as Holi is being celebrated even today in many parts of the country.

MCX Gold has pared its gains of this year, Gupta said. On the year-to-date (YTD) basis Gold futures are up by just 0.01 per cent on MCX while Silver futures are down by nearly 17 per cent, he adds.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)