Bullion Update and Market Outlook: Nirmal Bang
After a steep decline in price during last week, demand from India was seen improving due to Akshaya Tritya festival and U. S. stocks broadly dropped more than 3 percent, stirred by worries that problems would persist for the struggling banking sector which led to sharp upside in precious metals. Every time risk aversion has risen, we have seen precious metals moving up.
U. S. stocks slid on Monday on concerns over the sustainability of recent better-than-expected results from banks after Bank of America Corp reported a big increase in troubled loans, leading Indicators report from U. S. also pointed grim picture of U. S. economy. Dollar’s sharp upside was pointing towards a scenario that risk aversion is creeping in and investors are taking profits on riskier assets class and Gold’s appeal was seen rising due to uncertainty in financial markets.
Gold’s demand was seen improving in Indian domestic market after recent fall imports are expected to pick up due to imports picking up after steep fall.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings remain unchanged at 1,105.98 tonnes as of April 20. Holdings hit a record 1,127.68 tonnes on April 9, and remained at that level for a week.
Due to risk aversion creeping in, Gold prices may touch Rs. 14550-14600/10gm and on Comex it may test the psychological resistance of $900/oz. We recommend buying Gold and silver at dips during the day.
Gold: Gold prices in the previous session shootup by 385 points, but found resistance at 14469, i. e., earlier resistance level. Gold prices can move up to new levels, if prices manage to cross these 14465 levels on upside. Prices can move up to 14650-700 levels on crossing these 14465 levels.
Silver: Silver prices are seen taking support at the support line of the channel. Silver prices if maintains above the 20300 levels can take prices further upside till 21300 levels i. e. the earlier resistance levels. Thus buying can be done during the day in silver with SL of 20250 for immediate target of 20750.