Gold falls for fourth straight day but gains nearly 6% in April

Gold prices declined for the fourth straight day by Rs 171 to Rs 45,733 per 10 gram on April 30 in the Mumbai bullion market on a stronger rupee and a rally in the stock market. The yellow metal gained 5.93 percent in April on safe-haven demand and easing of monetary policy by central banks.

Major gold-trading centres have remained shut in the country due to the lockdown announced to prevent the spread of coronavirus.

The rate of 10 gram 22-carat gold in Mumbai was Rs 41,891 plus 3 percent GST, while 24-carat 10 gram was Rs 45,733 plus GST. The 18-carat gold quoted at Rs 34,300 plus GST in the retail market.

The World Gold Council in its Q1 Gold Demand Trends report said India’s January-March quarter demand declined 36 percent to 101.9 tonnes because of economic uncertainties, volatile prices and coronavirus-induced nationwide lockdown.

The country’s first-quarter gold demand slipped 20 percent to Rs 37,580 crore, compared to Rs 47,000 crore in the same period in 2019, the report said.

According to Navneet Damani, Vice President, Motilal Oswal, gold edged lower as risk appetite improved after positive trial results of an a possible COVID-19 treatment and a jump in oil prices. The US Federal Reserve’s vow to support the battered economy underpinned the safe-haven metal.

The US economy contracted in the first quarter at its sharpest pace since the Great Recession as stringent measures to slow the spread of the virus almost shut down the country, while economists expect an even sharper contraction in GDP in the second quarter. Market participants will keep an eye on the ECB policy meet scheduled later on April 30.

The broader trend on Comex could be $1,695-1,735 and on the domestic front, prices could hover in the range of Rs 45,345-45,890.

Comex gold pared some gains as selling pressure was seen at higher levels.

On virus front, some improvement is being reported at some hotspots while more and more countries are working towards reopening their economies. Improvement in virus-related situation is capping gains.

However, reduced safe-haven buying has pressured the US dollar and this might lend some support to gold. Immediate resistance was at $17,40 and support at $1,700, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 108.37 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices slipped Rs 30 to Rs 42,000 per kg from its closing on April 29.

On the MCX, gold touched an intraday high of Rs 45,940 and an intraday low of Rs 45,561. For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,327.

Gold futures for delivery in June gained Rs 127, or 0.28 percent on the MCX trading at Rs 45,673 per 10 gram in the evening trade in a business turnover of 14,110 lots. Gold contracts for August delivery rose Rs 203, or 0.44 percent, at Rs 45,860 per 10 gram in a turnover of 5,704 lots.

The value of the June contract traded, so far, is Rs 2,312.26 crore and August contract saw the value of Rs 120.19 crore.

Similarly, Gold Mini contract for June jumped Rs 108, or 0.24 percent at Rs 45,668 in a business turnover of 8,898 lots.

MCX gold has been trading under a falling trend line channel, he price is expected to trade negatively.

Sustaining below Rs 45,750 next leg of correction would drag prices towards Rs 45,550-45,450 intraday, Axis Securities said.

The broking firm advised its clients to sell June gold at Rs 45,750 with a stop loss at Rs 45,900 and a target of Rs 45,550.

MCX Gold price is expected to trade in a sideway marking, having support at Rs 45,550 and resistance at Rs 46,050, according to Motilal Oswal.

The broking said spot gold would trade in the $1,695-1,735 range.

At 1217 GMT, spot gold was up by $1.65 at $1,714.51 an ounce in London trading.

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