Indian Gold February futures slipped below 41,000 per 10 gm on February 3 tracking losses in the international Gold after China’s central bank injected liquidity into its markets to help support firms hit by a coronavirus epidemic.
Chinese authorities have pledged to use various monetary policy tools to ensure liquidity remains reasonably ample and to support firms affected by the outbreak in Wuhan, which has so far claimed more than 350 lives, Reuters reported.
“China’s central bank said it will inject 1.2 trillion yuan ($174 billion) worth of liquidity into the market via reverse repo operations on Monday. The dollar also firmed on Monday making gold expensive for holders of other currencies,” it said.
Coronavirus outbreak pushes global equity markets lower and safe-haven buying support prices of both the precious metals. After WHO declared coronavirus as a health emergency, prices of both the precious metals gained again.
On the MCX, February gold contracts were trading lower by Rs 265, or 0.64 percent, at Rs 40,983 per 10 gram at 0920 hours.
Experts are of the view that Gold is likely to remain volatile, but traders can look at investing in the Yellow metal on declines for a target of Rs 41,400 on the upside.
The government of India also maintained status-quo on import duty of gold and silver. Weakness in rupee support prices in the domestic market.
We expect the prices of both precious metals to remain firm and buy on dip strategy still work. Gold closed above 41200 and silver closed above 47100 in the domestic market.
Gold can be bought on the decline around 40950 with a stop loss of 40,770 for the target of 41400-41500. Silver can be bought around 46850 with a stop loss of 46500 for the target of 47,500-47,700.