Commodity market alert: Gold prices may rise on Brexit deal failure

After Brexit deal failure gold will get traction in coming days and will possibly break $1300 in international markets, weakness in rupee could additionally support gold prices in domestic markets. Gold is having support at $1284-1278 and resistance at $1294-1300.

By end of this week, gold futures may show the levels of Rs 3,600 per 10 gms as Fed Chief has shown no near intention of increasing interest rates. Photo source: Reuters

On account of slipping dollar index by near 0.1 per cent and dent to British Prime Minister Theresa May's bid to Brexit, commodity experts have expressed bullishness into the gold future prices. They ahve advised commodity investors to buy at every dip in gold future prices have strong support at the Multi Commodity Excchange (MCX) at Rs 32,100 per 10 gms levels and Rs 32,000 per 10 gms levels.

Manoj Kumar Jain, Director and Head of Commodity Research at IndiaNivesh told in a written statement, "After Brexit deal failure gold will get traction in coming days and will possibly break $1300 in international markets, weakness in rupee could additionally support gold prices in domestic markets. Gold is having support at $1284-1278 and resistance at $1294-1300."

Standing in sync with IndiaNivesh views that gold would gain traction Sugandha Sachdeva, Vice President at Religare Commodities told Zee Business online, "By end of this week, gold futures may show the levels of Rs 3,600 per 10 gms as Fed Chief has shown no near intention of increasing interest rates." She said that weak dollar and soaring crude prices would further help gold to shine in future markets.

Dollar/Rupee had a volatile day yesterday and after hitting a day low 70.8325 saw recovery towards 71.2650 then retreated towards 71.13 levels as speculation Brexit was kept indecision in the entire Forex market. A low was seen day after People’s Bank of China further eased reserve ratio cuts in order to increase liquidity in its economy. Technical, dolalr-rupee deviation breached its immediate resistance 71.05 and tested first predicted level of 71.25. However, retreated again towards 71.15. Intraday price action resulted in the formation of long bullish candlestick and pair remained above its short term consolidation resistance both of which are yet indicating for bullishness and pair expects to test 71.55 very soon. On the downside, support is 71.05 to 70.70.

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