Gold Price, Rupee and Equity Market Outlook: Yellow metal trends towards Rs 51900 level - What investors can look forward to | ICICI Securities highlights

Gold price has been rallying strongly in the last few sessions, lifted by a lacklustre dollar as investors awaited the US Senate runoffs in Georgia that will determine which party controls Congress and prospects of additional fiscal stimulus. Hence, ICICI Securities expect gold gold prices to remain positive towards Rs 51900 level in the short-term.

The US$INR pair has recovered from its major support of 73 levels, and has depreciated marginally towards 73.4. ICICI Securities expect the pair to remain in the range of 73 to 73.60 levels in the coming sessions. The dollar-rupee January contract on the NSE was at Rs 73.39 in the last session. The open interest in the January series remained flat in the last session.
 
Market Outlook: 

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Equity benchmarks recovered intraday losses (168 points) yesterday and concluded a volatile session on a positive note. The Nifty ended yesterday’s session at 14200, up 66 points or 0.5%. The market breadth remained strong with an Advance/Decline ratio of 1.3:1. Barring metal, all major indices ended in the green led by IT and financials.
 
Technical Outlook:
 
The Nifty maintained its winning spree and approached our earmarked target of 14200. Despite a gap down opening, the index staged a strong pullback, as elevated buying demand emerged from the psychological support of 14000. Consequently, it scaled a new record high (14215), indicating inherent strength. As a result, the index formed a bull candle carrying higher high, signifying continuance of positive bias

The rejuvenation of upward momentum backed by strong market breadth makes us confident to reiterate our constructive stance. ICICI Securities expect Nifty to extend the rally towards 14600 in coming weeks as our bottom up approach suggests that banking, IT and consumption stocks exhibit strength on a multi time frame chart, auguring well for longevity of ongoing up trend.

Broader markets continued to outperform the benchmark as the Nifty Midcap and small cap witnessed follow through strength to past two week’s range breakout, displaying acceleration of upward momentum underpinned by strong market breadth as currently 97% components of midcap and small cap indices are trading above their 200 days SMA compared to November reading of 90, signifying inherent strength and durability of the current up move.