Gold is likely to remain under pressure this week, while silver may follow suit. With the economies of major developing nations, including India, the largest gold importer, showing a decline in growth, the consumers are weighing prices for fresh investments in most liquid asset class.
India’s gross domestic product (GDP) recorded the slowest growth in six years at 5.3 per cent, far lower than the 7.6 per cent clocked in the second quarter, indicating that the purchasing power of the retail investors is declining with the fall in economic growth.
The jewellery sector, which accounted for 58 per cent of the global gold demand last year, seems to have been the hardest hit with consumers abstaining from fresh buying. Demand was lacklustre even during the wedding season (October-March) in India, as evident from the “nil” import of the yellow metal in February as against 23 tonnes during the same period last year.
“In the near term, prices are likely to move in a close range, while the longer term perspective is quite bullish,” said Navin Mathur, head-commodities, Angel Broking.
This week, the near month gold contract on the Multi Commodity Exchange (MCX) is expected to find very good support between Rs 15,280 and Rs 15,260 per 10 grams and strong support in the range of Rs 14,925-14,900 per 10 grams.
Trading below Rs 14,900 would lead to lower prices initially towards Rs 14,783 and then finally towards the major support level at Rs 14,600. Resistance is observed in the range of Rs 15,610-15,630 per 10 grams.
This week, the market is expected to find support levels at Rs 21,850 - 21,800 per kg and stronger support at Rs 21,500 - 21,450 per kg.