MCX Gold under short covering; Support seen at 50238
Commodity Online | July 24 2020
UPDATED 09:30:24 IST

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Technically Gold market is under short covering as market has witnessed drop in open interest by 14.74% to settled at 5603 while prices up 622 rupees.

Now MCX Gold is getting support at 50238 and below same could see a test of 49776 levels, and resistance is now likely to be seen at 51049, a move above could see prices testing 51398.

Gold yesterday settled up by 1.24% at 50700 to its highest driven by an escalation in U.S.-China tensions, while expectation of more stimulus measures lifted the metal's appeal as an inflation-hedge.

The United States gave China 72 hours to close its consulate in Houston amid accusations of spying, marking a dramatic deterioration in relations between the world's two biggest economies.

Leading U.S. Senate Republicans and the White House said they had hammered out agreements in principle on portions of a potential coronavirus-response bill, which could be presented to Democrats as early as this week.

Indicative of sentiment, SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.4% to 1,225.01 tonnes on Wednesday from 1,219.75 tonnes on Tuesday.

However, the price rise dampened retail demand for gold in India, the world's second largest consumer of the precious metal. India's gold imports in the June quarter plunged 96% from a year earlier to 13 tonnes after shipments virtually ground to a halt in April and May.

U.S. home sales increased by the most on record in June, boosted by historically low mortgage rates, but the outlook for the housing market is being clouded by low inventory and high unemployment amid the COVID-19 pandemic.

Trading Ideas:
--Gold trading range for the day is 49776-51398.
--Gold rose to its highest driven by an escalation in U.S.-China tensions, while expectation of more stimulus measures lifted the metal's appeal.
--The United States gave China 72 hours to close its consulate in Houston amid accusations of spying, marking a dramatic deterioration in relations.
--However, the price rise dampened retail demand for gold in India, the world's second largest consumer of the precious metal.

Courtesy: Kedia Commodities