Cautiously bullish gold recovers and makes new high

Chennai: Gold recovered the losses it had suffered since the reciprocal tariffs were announced and gained over Rs 7000 per 10 gm in MCX to touch a new high of Rs 93,736 on Friday and $273 per ounce in the international market to a high of $3230. Analysts are “cautiously bullish” about gold as the market is highly volatile.

Gold touched a low of Rs 86,710 in MCX in the beginning of the week after the US tariffs shook financial markets. In the subsequent sessions gold was seen rebounding and touching a new record high of Rs 93,736 on Friday. It has made a gain of 8 per cent in MCX.

Even in the international market, gold rebounded by 9.26 per cent to $3230, after falling to $2956 – a gain of $273 per ounce.

The full-fledged tariff war between China and the US with the latter levying 145 per cent tariffs on China and 125 per cent by China on the US is most likely to take the globe towards a recession. Further, the 10 per cent basic tariffs on all imports will increase inflation. “The uncertainty and global economic concerns are supporting gold. But if a major central bank decides to sell gold to pare its debt, it can bring down the gold prices sharply. The market is highly volatile, and we are cautiously bullish,” said Ajay Kedia, MD, Kedia Commodities.

“The immediate resistance for gold is seen at $3370 and the second resistance at $3520. The support level is $2710 and the huge gap between the support and resistance levels indicate extreme levels of volatility,” he added. The resistance levels can take gold in the Indian market to Rs 95,500 and Rs 98,000.

In the case of silver, prices have not recovered to the level before the fall as the industrial metals are still under pressure as uncertainties are looming large over China.

From Rs 99,658 a kg, silver prices had fallen 13.7 per cent to Rs 86,223 and have recovered only 7.6 per cent to Rs 92,961.