Last Updated : Oct 29, 2020 08:07 PM IST | Source: Moneycontrol.com

Gold falls for third straight days to Rs 50,840/10 gm, silver crashes Rs 1,504/kg

In the futures market, gold touched an intraday high of Rs 50,617 and a low of Rs 50,280 on the MCX


Gold prices declined for the third consecutive day by Rs 149 to Rs 50,840 per 10 gram in the Mumbai retail market on a weaker rupee against the dollar and sluggish global cues. The precious metal declined to a two-week low in the domestic market due to uptick in dollar and lower appetite for commodities.

Investors continued to have faith in the US currency supported by safe-haven buying amid surging coronavirus cases and approaching US elections. The dollar traded trade firm at 93.73, up 0.35 percent, against a basket of major currencies, its highest since October 15.

France and Germany announced fresh lockdowns as a step to slow the second wave of coronavirus infections.

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Spot gold was trading marginally down $4.46 at $1,872.61 an ounce at 12:09 GMT in London trading.

Gold holdings in SPDR ETF decreased 8.5 tonne to 1258.25 tonne, the lowest since September 17. 

MCX iCOMDEX Bullion Index was down 91.34 points, or 0.59 percent, to 15,306.65 at 17:52 hours. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

The rate of the 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,130, Rs 46,569 and Rs 50,840, respectively, plus 3 percent GST.

World Gold Council said India demand in Q3 (July-September) fell 30 percent year-on-year to 86.6 tonne. It said jewellery demand declined 48 percent to 52.8 tonne as compared to 101.6 tonne YoY.

The gold-to-silver ratio currently stands at 84.83 to 1, which means the amount of silver required to buy one ounce of gold. 

Silver prices declined Rs 1,504 to Rs 59,926 per kg from its closing on October 28.

In the futures market, gold touched an intraday high of Rs 50,617 and a low of Rs 50,280 on the Multi-Commodity Exchange (MCX). For the December series, the yellow metal touched a low of Rs 48,384 and a high of Rs 56,379.

Gold futures for December delivery slipped Rs 222, or 0.44 percent, to Rs 50,273 per 10 gram in evening trade on a business turnover of 13,673 lots. The same for February delivery edged lower by Rs 204, or 0.40 percent, to Rs 50,390 on a business turnover of 2,219 lots.

The value of the December and February’s contracts traded so far is Rs 3,387.96 crore and Rs 41.46 crore, respectively.

Similarly, Gold Mini contract for December dropped Rs 241, or 0.48 percent, to Rs 50,345 on a business turnover of 10,004 lots.

Navneet Damani, Vice President, Motilal Oswal, sees international and domestic gold prices hovering in the $1,865-1,895 and Rs 50,120-50,750 range. 

Trading strategy

Sriram Iyer, Senior Research Analyst at Reliance Securities

Gold shed all its gains in morning trade of October 29 and was down in the afternoon session as well as the dollar continued to rally. 

Technically, LBMA Gold Spot is trading below its 100-DMA, which is placed at $1,887 levels, indicating continuation in its bearish momentum to $1,862-$1,855 levels. Resistance is seen at $1,887-$1,895 levels.

MCX December Gold futures is trading below most moving averages, which signifies a bearish trend. One may see Rs 49,900-49,700 levels. Resistance is seen at Rs 50,550-50,700 levels.

Tapan Patel- Senior Analyst (Commodities), HDFC Securities:

Gold prices declined on the back of a strong dollar recovery after France and Germany imposed fresh lockdown restrictions. We expect gold prices to trade sideways to down for the day with resistance and support for COMEX gold at $1,890 and $1,860 per troy ounce, respectively. Support for MCX December Gold futures lies at Rs 50,100, with resistance at Rs 50,600.

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First Published on Oct 29, 2020 08:07 pm
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