Gold Prices: Bulls Seen In Yellow Metal This Week; What Should Be Your Buying Strategy?

Gold prices neared a two-week high on Tuesday ahead of the US Federal Reserve's rates decision. The bullion recorded the best gains in eight days with spot gold surpassing $1,930 levels. For the remaining days of the current week, Religare Broking is suggesting buying the bullion in the range of Rs 58750-58775 per 10 grams for MCX Gold Futures expiring in October 2023. The target is set for Rs 59,325 per 10 grams this week.

On Tuesday, at the time of writing, spot gold traded at $1,934.31 an ounce, up by 0.01%. While US gold futures expiring in December surged by 0.14% to trade at $1,956.05 an ounce. Meanwhile, the US dollar slipped by 0.3% against a basket of currencies, making the yellow metal attractive for overseas buyers.

Investors are expecting a pause in key rates from the US Federal Reserve, while they will keenly gauge chair Jerome Powell's speech for further monetary policy outcomes.

FOMC meetings have kick-started from September 19, and the policy decisions will be announced on September 20.

In India, the 22-karat gold price is up by Rs 150 to Rs 55,200 per 10 grams, compared to Rs 55,050 per 10 grams on the previous day. Meanwhile, the 24-karat gold is available at Rs 60,220 per 10 grams, rising by Rs 170 on Tuesday as against Rs 60,050 per 10 grams of the previous day.

However, trading in gold futures and options on MCX is not open on Tuesday due to the Ganesh Chaturthi celebration. On Monday, MCX gold futures expiring in October also soared by Rs 257 or 0.44% to Rs 59,250 per 10 grams. The bullion was near its day's high of Rs 59,258 per 10 grams.

In its weekly report, Religare Broking said, "Gold reached a four-day high of 1,930 and finished near its highest daily close in the last eight days. The recent economic releases suggested that inflation may not prompt a big change in the Federal Reserve's decision over the interest rate hikes. Gold was strong for later part of the week as the jobless claims data that reported that US applications for jobless claims rose by 3,000 to 220,000 for the week ending Sept. 9. Easing rate hike fears are likely to support the market in days to come."

Religare in its technical outlook said, "There is a potential bullish setup occurring in COMEX gold on the weekly chart as well. MCX Gold has ended the week with a bullish hammer candlestick pattern. The short-term charts are now turning strong with the upside potential of Rs.59000 in the coming days. Trades to be initiated on the buy side positionally."

Hence, Religare has recommended buying Gold October expiry at Rs 58750-58775 with a stop loss of Rs 58380 for a target price of Rs 59325.

For silver, the brokerage said, "Formation of a bullish hammer weekly candlestick pattern indicates improving buying interest for the coming days. The 71000/71500 region has now tuned out to be a valid support region. The chances of December silver to move towards the 74000 level have increased now. Remain long positionally."

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.