Gold price in India rose sharply on Monday, following the global cues. On the Multi Commodity Exchange (MCX), gold price increased 1.55 per cent to Rs 50,999 for 10 grams at 0905 hours on February 28. Silver price also jumped significantly on Monday. The precious metal future was 1.41 per cent up to Rs 65,820 for a kilogram on February 28.
In the international market, gold prices were set for their best monthly gains in nine months. The fresh sanctions by the United States on Russia for invading Ukraine, pushed the price of yellow metal. Spot gold price climbed 1.2 per cent to $1,909.89 per ounce by 0124 GMT while US gold futures were up by 1.1 per cent to $1,908.30.
Gold is usually considered as a hedge against inflation. The yellow metal gained about 6.3 per cent this month amid escalating tension between Russia and Ukraine.
Last week, the Western Nations put harsh sanctions on Russia including blocking some banks from the SWIFT international payments system. Russian President Vladimir Putin put Russia’s nuclear deterrent on high alert on Sunday. EU, then, shut all Russian planes out of its airspace, forcing Russian airline Aeroflot to cancel all flights to European destinations until further notice. So, this could spur the Bank of Russia to buy gold again. Bank of Russia announced that it will start buying gold again, nearly two years after it had ended a long run of purchases.
Prices for most commodities are higher due to the tensions in Eastern Europe and inflation as gauged by the Fed’s preferred core PCE measure rose 5.2 per cent in January from a year ago. That was the biggest rise since April 1983.
Gold Price Future
“Gold prices has shown profit booking on account of the development in Russia Ukraine war. The gold investors are advised to keep an eye on Russia-Ukraine news as any military action by NATO may re-ignite the Russia-Ukraine war. Focus has now again shifted towards inflation, higher crude oil prices, US Fed meeting and expected interest rate hike by various global central banks. Buy Zone Near – Rs 50,000 for the target of Rs 50,350. Sell Zone Below – Rs 49,900 for the target of Rs 49,600,” said Ravi Singh, vice president and Head of Research, ShareIndia.
International gold has started stronger weaker this Monday morning in Asian trade after Western nations ramped up sanctions on Russia in response to its assault on Ukraine, spurring demand for the haven asset. Additionally, gold will also get a boost from higher inflation trade.
“Technically, if LBMA Gold trades above $1920 level it could witness a bullish momentum up to resistance zone at $1920-$1932. A trade below could pull prices to the support zone at $1909-$1897. Domestic gold prices could open stronger this early Monday morning, tracking overseas prices. Technically, if MCX Gold April trades above Rs 50,200 level it could witness a bullish momentum up to resistance zone at 50400-Rs 50,500. A trade below could pull prices to the support zone at Rs 50,050-49,800,” said Sriram Iyer, senior research analyst at Reliance Securities.
Silver Price Outlook:
“Technically, if COMEX Silver May trades above $24.800 level it could witness a bullish momentum up to the resistance zone at $25.800-$26.000. A trade above could push prices to the support zone at $24.080-$23.440. Domestic silver prices could start stronger this early Monday morning, tracking overseas prices. Technically, if MCX Silver May trades above Rs 64,000 level it could witness a bullish momentum up to the resistance zone at Rs 64,500-65,200. A trade below could pull prices to the support zone at Rs 63,400-62,100,” Iyer added.
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