MCX Gold under short covering; Support seen at 49739
Commodity Online | July 23 2020
UPDATED 09:30:44 IST

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Technically Gold market is under short covering as market has witnessed drop in open interest by 6.82% to settled at 6572 while prices up 551 rupees.

Now MCX Gold is getting support at 49739 and below same could see a test of 49400 levels, and resistance is now likely to be seen at 50308, a move above could see prices testing 50538.

Gold yesterday settled up by 1.11% at 50078 propelled by a softer U.S. dollar and expectations for more stimulus measures to resuscitate pandemic-hit economies, which could stoke inflation.

Loose liquidity conditions are expected to further prop up the bullion prices, as the U.S. Fed would probably maintain a "dovish" stance this month given the current trend of coronavirus outbreak in the U.S.

However, the price rise dampened retail demand for gold in India, the world's second largest consumer of the precious metal.Central banks have slashed interest rates and rolled out a wave of stimulus measures to cushion the economic damage from the pandemic, helping gold prices surge.

Gold Speculators Trimmed Bullish Bets For 1st Time In 5 Weeks - Large precious metals speculators cut back on their bullish net positions in the Gold futures markets, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC).

The non-commercial futures contracts of Gold futures, traded by large speculators and hedge funds, totaled a net position of 262,428 contracts in the data reported through Tuesday, July 14th. This was a weekly decline of 4,930 net contracts from the previous week which had a total of 267,358 net contracts.

Trading Ideas:
--Gold trading range for the day is 49400-50538.
--Gold rose propelled by a softer U.S. dollar and expectations for more stimulus measures to resuscitate pandemic-hit economies.
--Loose liquidity conditions are expected to further prop up the bullion prices, as the U.S. Fed would probably maintain a "dovish" stance.
--Central banks have slashed interest rates and rolled out a wave of stimulus measures to cushion the economic damage from the pandemic.

Courtesy: Kedia Commodities