Gold prices on April 23 were steady at Rs 47,806 per 10 gram in the Mumbai retail market on rupee depreciation and firm global cues after the previous day's slide on upbeat economic data. The yellow metal traded sideways to higher, tracking weakness in the US dollar, surging coronavirus cases and a sharp fall in cryptocurrencies.
The precious metal surged Rs 3,616 or 8.18 percent in the domestic market in April so far and ended the week with a gain of Rs 637 or 1.35 percent.
The rate of 10 gram 22-carat gold in Mumbai was Rs 43,790 plus 3 percent GST, while 24-carat 10 gram was Rs 47,806 plus GST. The 18-carat gold quoted at Rs 35,855 plus GST in the retail market.
A softer US dollar, falling Treasury yields and a correction in equities attracted investor interest in bullion. "Concerns over the fiscal impact of the second wave of coronavirus pandemic also helped gain momentum. However, signs of economic recovery in key economies are likely to dent major gains in the commodity," said Hareesh V, Research Head, Commodities at Geojit Financial Services.
Switzerland in March recorded its biggest monthly gold exports in 10 months as shipments to India jumped, boosting the overall sentiment. On the other hand, metal prices are gaining amidst the distress in the global economy due to the rise in coronavirus cases. At the ECB policy meeting on April 22, the central bank said there were clear signs of improvement in the economy, although they continued to show concerns regarding the rise in COVID cases.
The bullion metal regained its safe-haven status as Bitcoin price slump below $50,000, down over 9 percent after reports indicate that Washington is planning to raise capital gains tax. The cryptocurrency has attracted investors’ attention and emerged as an inflation hedge and a lot of smart money moved to Bitcoin as a safe-haven asset.
Bitcoin has tumbled $15,198.7 or 23.46 percent from the high of $64,778 it touched on April 14.
The US dollar trades lower at 90.91, or down 0.44 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund was unchanged for the third day at 1,021.7 tonnes.
Spot gold jumped by $10.73 to $1,794.72 an ounce at 1239 GMT in London trading.
MCX Bulldesk surged 70 points or 0.47 percent, at 15,022 at 18:10. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President, Motilal Oswal said, "Market participants will keep an eye on the preliminary Manufacturing and Service PMI data expected from major economies. The broader range on COMEX could be between $1772 and $1805, and on the domestic front, prices could hover in the range of Rs 47,500-48,250.”
“COMEX gold trades higher near $1792/oz. Supporting the gold price is rising virus cases, choppiness in the equity market amid concerns about US corporate tax and ECB’s emphasis on continuing with loose monetary policy. However, weighing on price is the lack of ETF buying and concerns about Indian demand and improving outlook for the US economy. Gold is struggling to break past the $1800/oz level amid choppy US dollar; however, general bias remains positive amid rising virus concerns,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 69.13 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices tumbled by Rs 648 to Rs 69,152 per kg from its closing on April 22.
In the futures market, the gold rate touched an intraday high of Rs 48,026 and an intraday low of Rs 47,580 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 44,108 and a high of Rs 51,924.
Gold futures for June delivery gained Rs 216, or 0.45 percent, at Rs 47,988 per 10 gram in evening trade on a business turnover of 11,136 lots. The same for August rose Rs 239, or 0.50 percent, at Rs 48,304 on a business turnover of 2,711 lots.
The value of June and August’s contracts traded so far is Rs 2,066.24 crore and Rs 90.25 crore, respectively.
Similarly, Gold Mini contract for May edged higher Rs 219, or 0.46 percent at Rs 47,645 on a business turnover of 14,648 lots.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
We expect gold prices to trade sideways to up for the day with COMEX spot gold support lies at $1,770 and resistance at $1,800. MCX Gold June support lies at Rs 47,500 and resistance lies at Rs 48,200.
Axis Securities
MCX Gold price is trading near the resistance line of descending broadening wedge pattern, and the price is expected to trade positively. A breakout above Rs 47,950 would push the price higher towards Rs 48,150-48,300 levels in intraday. The price has been forming a support near 100 hourly EMA which shows bullish momentum.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International gold is trading with negative bias. Prices traded at $1,795 levels for the first time in more than a month and declined from those levels. On the domestic front, MCX Gold has been trading flat since morning and prices have taken support of 50-SMA and may rise from there, testing Rs 48,250-48,400 level on the upside in the evening session. It has support at Rs 47,450-47,150 levels.
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