Gold & Silver

Gold prices to remain under pressure on easing global worries

Rutam Vora Ahmedabad | Updated on November 25, 2019

Spot gold may hover around Rs 38,000 with likelihood of a further weakness

India spot gold is likely to remain lower on Monday, as international geopolitical fears appeared to be easing. Since touching a peak of Rs 38,856 per 10 grams (for 999 purity spot as quoted by IBJA) on November 1, the yellow metal has remained under pressure.

With markets entering the last week of November, gold prices may face further pressure towards the month-end, primarily in the absence of any significant international factor fuelling prices. US-China trade tensions appeared to be easing, with positive developments towards an interim truce.

Gold prices on Monday opened 25 points in the negative, after a weak closing on Friday, November 22. The MCX Gold for December contract quoted negative at Rs 37,800 per 10 grams in Monday opening trades, while spot prices were last quoted at Rs 38,310 per 10 grams on Friday by the India Bullion and Jewellers’ Association Ltd (IBJA).

Analysts have turned bearish for the yellow metal in the short-term, with the likelihood of further weakness in prices.

Commenting on the factors influencing gold movement, Aasif Hirani, Director, Tradebulls said, "Gold lost some of its shine after the US and China underscored their desire to sign an initial trade deal on Friday. Physical gold demand remains subdued, which puts further pressure on gold prices, as India’s imports dipped by 9 per cent during April-October."

For the price outlook, Hirani told BusinessLine, "Gold has strong support in the MCX around 37,500 and resistance at 38,300. Gold prices are expected to remain under pressure as long as 38,300 is not breached. In COMEX, gold needs to breach its first resistance of $1,475 for the bulls to stage a comeback. Maintain sell on rise strategy for intra-day, with the expected target of 37,800 till 37,730, and stoploss of 38,150."

International gold movement remained subdued, with Comex gold for December quoting at $1,461.3, down by $2.3 an oz from the previous close.

Published on November 25, 2019

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