IGI Logo

GOLD

MCX Gold futures witnessed bearish movement during the February month so far amid reports of various vaccine developments across the globe. But then, United States and Europe has again witnessed further rise in Covid-19 cases which has brought fears in the global market. Simultaneously, rising Indian and global equity markets led to limited demand for gold in the domestic markets. No major developments from FED policies and optimistic view by Reserve Bank of India in its latest monetary policy meeting regarding the Indian economy has capped upside movement. By 11” February, MCX Gold futures closed at Rs. 47360/10 grams, lower by 3.53% compared to Rs.49096/10 grams reported on 31" January. Fundamentally for the coming month, we expect international Gold futures to continue to trade bearish as Joe Biden has unveiled a $1.9 trillion coronavirus relief proposal, aimed at urgently combating the pandemic and economic crisis triggered. Though this could also improve investments in riskier assets such as gold however, on the longer duration gold could remain in the weaker zone as there is good recoveries in the 10-year bond yields in the U.S. In addition, U.S, health officials hope new COVID vaccine rules can ease latest surge, after the US Administration is expected to improve the vaccine doses, The U.S. Economic Data in the coming weeks is forecasted to show further recoveries with Economists at Goldman Sachs Group said recently that their U.S. GDP forecast for the second quarter to be up at 11% from 10%. Elsewhere, Indian economy is showcasing greater amount of recoveries especially in the industrial and infrastructure sectors, Moreover, Gold prices could see downtrend as ETF investments in gold has showna slowdown with recoveries in other domestic sectors. Furthermore, China's exports grew more than expected in December, albeit at a slower pace than the month before, as global demand for Chinese goods remained solid, while import growth quickened, as per the Customs data. Overall, we expect bearish trend in MCX Gold futures for the month ahead

On the daily chart, MCX Gold (Feb) has formed  a series of “Lower Highs & Lower Lows” which indicates weakness in the counter. Also, “Super Trend (7,1) indicator” has shown a sell signal, which suggests bearish movement in the counter. Moreover, price has sustained below its “Ichimoku Cloud” which signals bearishness in the counter. Furthermore, momentum indicator RSI (14) has remained below its 50 level which suggests negative momentum. Moreover, momentum indicator, Stochastic (6) has given a fresh negative crossover which indicates a downward bias in the counter. So, based on the above technical structure one can initiate a short position in MCX Gold (Feb) future at CMP 47500 or arise in the prices till 47570 levels can be used as a selling opportunity for the downside target of 46700. a However, the bearish view will be negated if MCX Gold (Feb) closes above the resistance of 47950.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://choicebroking.in/disclaimer

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer