The price of gold for April futures on the Multi Commodity Exchange (MCX) surged past Rs 86,000 per 10 grams on Tuesday, marking a significant milestone for the precious metal. Gold opened at a fresh peak of Rs 86,350 per 10 grams, reflecting a rise of 0.62% or Rs 534 from the previous trading session. The rally in gold prices comes amid continued global uncertainty, further boosting its appeal as a safe-haven asset.
Simultaneously, silver futures for March saw a marginal increase of 0.08%, trading at Rs 95,373 per kilogram. While the domestic market witnessed a mixed performance on Monday, the overall trend for precious metals remained positive. Gold finished the previous session at Rs 85,816 per 10 grams, up 1.09%, while March silver futures closed at Rs 95,295 per kilogram, slipping by 0.04%. This mixed performance continued despite the ongoing weakness of the Indian rupee, which has failed to dampen the strong international demand for gold.
Global Markets and Factors Driving the Surge in Gold
International precious metal prices also displayed strength, with gold reaching historic highs amid a backdrop of global economic and political uncertainty. A significant factor driving the demand for gold is the rising geopolitical tensions, particularly in the wake of US President Donald Trump’s proposal for 25% tariffs on steel and aluminum imports. This trade threat has fueled concerns of a potential trade war, pushing investors toward safer assets like gold.
Manoj Kumar Jain, the head of Prithvifinmart Commodity Research, explained, “Gold prices have been boosted not only by global trade concerns but also by a recent move from China. The country has launched a pilot program allowing insurers to purchase gold, a decision that could free up to $27 billion in funds. This initiative is expected to add significant support to gold prices, with the metal potentially reaching levels of $3,000 per troy ounce in the near future.”
However, despite the bullish outlook for gold, Jain pointed out that the strengthening US dollar could cap the metal’s gains. The US Dollar Index (DXY) recently saw a 0.13% increase, reaching 108.46, marking a near-108 level. This surge in the dollar’s value could restrict the upside potential for gold and other precious metals in the short term.
Outlook for Gold and Silver Prices: Volatility Expected
Looking ahead, Jain anticipates further volatility in gold and silver prices, driven by a combination of market forces, including fluctuations in the dollar index, the ongoing trade war concerns, and upcoming events in the US, particularly the testimony of US Federal Reserve Chairman Jerome Powell. “We expect gold and silver prices to remain volatile throughout the week,” Jain added, noting the influence of these multiple factors on the precious metals market.
For traders and investors keeping an eye on the MCX gold market, Jain recommends key support and resistance levels. He suggests that gold futures on MCX are likely to find support between Rs 85,350 and Rs 84,800 per 10 grams, with resistance levels at Rs 86,200 and Rs 86,650. These levels are crucial for traders looking to make informed decisions in the face of market fluctuations.
Silver Outlook and Trading Strategy
As for silver, Jain has outlined support levels in the range of Rs 94,400 to Rs 93,750, with resistance standing between Rs 96,000 and Rs 96,650. He further advises that investors consider purchasing silver near Rs 95,000, setting a stop-loss at Rs 94,350, with a target price of Rs 96,600. Given the volatility in silver prices, Jain’s strategy focuses on maintaining flexibility while capitalizing on short-term price movements.
Market Strategy for Investors and Traders
For investors looking to hedge against potential market uncertainties, both gold and silver continue to present attractive options. The combination of rising trade tensions, geopolitical risks, and ongoing inflationary pressures has ensured that demand for precious metals remains strong. Furthermore, with the US Federal Reserve’s actions and statements expected to continue influencing the global financial landscape, gold and silver are likely to remain volatile but potentially rewarding assets in the coming weeks.
In conclusion, as gold prices soar to new heights, experts recommend staying attuned to key market indicators, including currency movements and political developments, which will play a pivotal role in shaping the precious metals market’s direction. With gold trading at historically high levels and silver following suit, investors may want to consider carefully timed entries and exits, as the market remains fluid and susceptible to external shocks.
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