By Bhavik Patel
Gold rose above $1985 this week however a powerful USD restricted gold’s upside. The U.S. greenback index breached the important thing psychological degree of 100 Thursday. Investors are on the lookout for security outdoors of among the chaos and uncertainty that we see within the markets and that’s the reason they’re on the lookout for safe-haven demand which is why the US greenback has been appreciating. Renewed stress from the stronger U.S. greenback might hold gold caught in a buying and selling vary till the index falls again beneath 100.
Rising yields within the U.S. are additionally boosting the buck and pressuring the dear steel. Fundamentals and nonetheless intact for bullish momentum in gold, however a stronger greenback is limiting gold’s rally. If the greenback dips again down in direction of the 99-98 vary, that can make it quite a bit simpler for gold to interrupt by $2,000. Upcoming Fed reserve assembly in May and BOE rate of interest announcement will probably be positioned shut consideration by gold merchants.
Risk aversion is a bit keener heading into an extended three-day vacation weekend for a lot of international locations and which will have considerably restricted promoting stress on the safe-haven metals. On MCX, gold is caught within the vary of 52000-53500. Any additional breakout is anticipated above 53500. 50000 is a strong assist and we imagine it’s sturdy assist that’s unlikely to interrupt proper now. Long positions might be additional added above 53500 for the goal of 55000.
In quick time period, we’re bullish though don’t anticipate any runaway rally because of the sturdy US greenback. As talked about, the US greenback index wants to return beneath 98 for an extra rally in gold costs. It will probably be tough for gold to cross $2000 with rising US yields and greenback. Expect gold to commerce within the vary of 51500-53500 subsequent week and merchants might await some correction close to 52300-52000 for purchase with a cease lack of 51000 and an upside goal of 53500. Data to observe subsequent week can be on Wednesday: U.S. current residence gross sales, Thursday US jobless claims and Friday Manufacturing PMI.
(Bhavik Patel is a Commodity & forex analyst at Tradebulls Securities. The views expressed are the creator’s personal. Please seek the advice of your monetary advisor earlier than investing.)
Source: www.financialexpress.com”