MCX Gold under short covering; Support seen at 49183
Commodity Online | July 22 2020
UPDATED 09:30:15 IST

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Technically Gold market is under short covering as market has witnessed drop in open interest by 3.32% to settled at 7053 while prices up 500 rupees.

Now MCX Gold is getting support at 49183 and below same could see a test of 48838 levels, and resistance is now likely to be seen at 49726, a move above could see prices testing 49924.

Gold yesterday settled up by 1.02% at 49527 propelled by a softer dollar and expectations of more stimulus measures to resuscitate pandemic-hit economies.

Gold's advance defied a gain in world shares on the European Union's 750 billion euro ($857 billion) stimulus plan and hopes for coronavirus vaccines.

Gold tends to benefit from widespread stimulus as the metal is widely viewed as a hedge against rising prices and currency debasement.In the United States too, congressional Republicans announced plans to seek another $1 trillion in economic relief.

A surge in virus cases in the United States and globally have stoked doubts about economic recovery, helping gold gain about 20% so far this year.

Physical bullion remained out of favour among consumers in top hubs China and India in the grip of the coronavirus, while investors in Singapore and Japan bought gold and silver to safely park their wealth.

Discounts in top buyer China deepened to $30-$25 an ounce versus global benchmark prices, from $20-$25 last week.

Meanwhile a battle in the U.S. Congress over a new coronavirus-aid bill began last week as Republicans put the finishing touches to provisions granting liability protections for entities resuming operations amid the pandemic.

Trading Ideas:
--Gold trading range for the day is 48838-49924.
--Gold gained propelled by a softer dollar and expectations of more stimulus measures to resuscitate pandemic-hit economies.
--Gold's advance defied a gain in world shares on the European Union's 750 billion euro ($857 billion) stimulus plan and hopes for coronavirus vaccines.
--In the United States too, congressional Republicans announced plans to seek another $1 trillion in economic relief.

Courtesy: Kedia Commodities