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Gold prices on Wednesday posted sharp gains in the domestic and global markets following fresh concerns on US-China trade negotiations.
Spot gold on Tuesday gained sharply, reflecting a sharp movement in the international markets. The India Bullion and Jewellers’ Association (IBJA) quoted gold prices at Rs 38,265 per 10 gm (PM rates for 999 purity without tax), which was higher by Rs 250 intra-day.
MCX Gold futures for the most active February contract advanced to Rs 38,362 in opening trades on Wednesday. The CME Gold December futures were quoted at $1,479 an ounce.
US President Donald Trump on Tuesday stated that the US-China trade deal may have to wait until after the US presidential election in November 2020, which has impacted the prospects of a trade truce between the two largest economies anytime soon.
CME Gold futures rose sharply to $1,479 an ounce on Tuesday. The upside is primarily attributed to the latest uncertainty over global trade, with investors turning towards safe haven assets.
Also, the US released new data from the Institute of Supply Management (ISM), which noted that manufacturing activity contracted in November, further pointing towards a weaker economy.
Dinesh Thakkar, CMD, Tradebulls, said, "Gold posted good gains yesterday, following downbeat remarks from President Trump regarding the US-China trade negotiations. This prompted a risk-off mode and safe haven buying was seen in precious metals, along with a fall in the global equity markets."
"Gold bulls have a near-term technical advantage, as they have crossed the resistance of 38300 on MCX. The next resistance is $1,500 and Rs 38,600 on the MCX. The next trigger for the gold market would be non-farm payroll data on Friday," added Thakkar.
"After yesterday’s rally, gold might consolidate in early morning trade, but intra-day gold remains a buy on dips until 38,000 is not breached on the downside. The upside looks limited at 38,500, but the upside momentum is a good sign for gold bulls," he said.
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