Traders can buy Gold October Futures above 38,400 with 38,100 as stop loss and target towards 38,800 can be expected.

Source: #MoneyControl

Easing tensions between the US and China following the announcement of renewed trade talks has made investors rethink the risk of recession.

This has encouraged long bond investors to book profits, driving interest rates higher in the process. Additionally, the stock market investors, betting on a stronger economy, also began reducing their safe-haven gold purchases.

Meanwhile, SPDR trust fund data showed that investors pulled out some money from the fund as the holding in the week ended September 15, 2019 declined by 9.38 Metric Tonnes to 880.38 Metric Tonnes.

Hedge funds and money managers reduced their bullish positions in COMEX gold and silver contracts in the week to September 10 by 42,981 contracts to 247,728.

Meanwhile, Comex Silver Speculators cut net long positions by 1,904 contracts to 61,561 in the week to September 10.

Domestic gold and silver prices tracked international prices and remained volatile during that week and ended with big cuts.

Domestic Gold futures fell by over 2.5 percent, while Silver futures fell by over 4 percent in the week ended September 13, 2019. However, Gold exchange-traded funds in India saw the highest inflows in more than six years as investors poured in money seeking safe havens amid record-high domestic prices.

Net inflows in August into gold ETFs rose to Rs 145 crore, the highest since December 2012, according to data from the Association of Mutual Funds in India.

TECHNICAL OUTLOOK:

MCX Gold October has been going through high volatility in the last few days. The daily chart suggests that prices have been intact in the upward moving channel and recently it managed to protect the same which is a positive sign.

However, there is yet no positive confirmation and one should wait for a clear breakout. Over the near-term, if 37,200 is intact on the downside where 50-Days EMA is placed, the trend will remain positive.

Only a break below this level will indicate that trend is reversing on the downside.

Hence, buy Gold October Futures above Rs 38,400 with Rs 38,100 as stop loss and target towards Rs 38,800 can be expected.

International Outlook:

LBMA Gold has arrived at the channel support along with Lower Bollinger Bands. This indicates that zone of $1,490-1,485 is the crucial support zone to watch for.

Last week prices spikeED near $1,525 level, hence move above $1,525 is required for resumption of up move towards $1,560 levels. On the other side, any break below $1,485 can result in deeper correction towards $1,460 levels. One should wait for a decisive breakout.

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Published on Sep 18 2019 11:09PM, by wealthbuildup in Gold| Share This