Gold June futures breach Rs 71,000/10 gm, silver notches Rs 82,000 levels per kg

Gold prices in Monday’s trade touched a new all time high on the MCX. At the time of writing the copy, June Gold futures traded higher by Rs 358 or 0.51 per cent at Rs 70,994 per 10 gm, while at day’s high it logged levels of Rs 71,080 per 10gm.

Gold rose to another record in early Asian trade today, extending a week’s long rally as prices touched a high of $2353.81 an ounce in Spot with China’s central bank purchasing gold for its reserves for a 17th straight month in March. Bullion held by the People’s Bank of China rose 0.2% to 72.74 million troy ounces last month, according to official data released Sunday. It’s the smallest increase in the run of monthly purchases that began in November 2022.The precious metal has been on a tear in the past two months, hitting a procession of records on expectations that lower US interest rates are on the horizon. 

Typically, lower interest rates in the economy increase the appeal of the bullion as the lure for other interest-yielding securities fades to some extent.

Outlook

"Gold’s scorching run to an all-time high can be explained from a distance, given the fractious geopolitical climate and murky outlook for the global economy while the yellow metal still has more room to run on a medium term perspective. Global central banks including India & China are still adding up to their reserves in Gold which supports the sentiment in Gold. For this week we will look ahead to Inflation data from China & US amid minutes from the latest US Fed meeting to offer more clues on timing of rate cuts in coming months. Meanwhile, Silver fundamentals also remaining strong amid cheaper valuations as compared to Gold makes it a more favorable metal to invest in a medium to long-term perspective," said Neha Qureshi, Manager- Technical and Derivatives Research Analyst, AnandRathi Commodities and Currencies.

Trading strategy in gold 

Qureshi suggests buying on dips in the MCX gold at around Rs 70,700 for a target of Rs 71,300, keeping a stop loss at Rs 70,300. For Silver, the expert suggests buying Silver MCX futures for a target of Rs 82,900 at Rs 80,900 and with a stop loss pegged at Rs 79,900.