Since February 2016, Gold is trading in sideways mode between 28,000 – 30,000 per kg on the broader scale. Interestingly China (Shanghai Gold Exchange) last week launched its own yuan denominated Gold contracts which will become the reference price for gold in the country. The benchmark price for a 1 kg contract was set at 256.92 yuan/gram on Tuesday at the launch of the benchmark contract.
In the Indian Market Gold Jewellers went on a long strike since March extending till 1st week of April to protest over the reintroduction of a sales tax on gold jewellery after four years. Local demand is expected to pickup as Akshaya Tritiya on May 9 is nearing up. Retail crowd turned bullish on Gold and Silver. However technical are negative for this week and the price is expected to come down further. EOD sentiment is holding negative at this point which indicates further weakness in Gold Future Contracts.
Our Expectation is price is likely to trade in the range for sometime in the zone Rs28,000 – 30,000. Current supports are around 28200. Any break down below this supports could bring further momentum on the downside.