Gold gains marginally to hit Rs 42,446 per 10 gram, silver slips by Rs 100 per kg

Gold prices on March 3 gained Rs 120 to touch Rs 42,446 per 10 gram in the Mumbai bullion market on rupee depreciation. The price of the precious metal also jumped on expectations that central banks may announce financial stimulus measures to offset coronavirus impact on the global economy.

The rate of 10 grams 22-carat gold in Mumbai was Rs 38,881 plus 3 percent GST, while 24-carat 10 gram was Rs 42,446 plus GST. The 18-carat gold was quoted at Rs 31,835 plus GST in the retail market.

According to Navneet Damani, Vice President, Motilal Oswal, gold prices edged higher on increasing bets of an interest rate cut by global central banks to mitigate the economic impact from the coronavirus outbreak.

Market participants piled into bets that the US Federal Reserve will deliver a big dose of stimulus starting this month amid concerns over economic impacts. The Fed and ECB have also joined the chorus of central banks signaling a readiness to deal with the growing threats from the virus outbreak.

The broader trend on Comex could be $1,580-1,625 and on the domestic front, prices could hover in the range of Rs 41,900-42,350, said Damani.

The gold/silver ratio currently stands at 94.36 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices fell Rs 100 to Rs 44,980 per kg from its closing on March 2.

Also read: Sovereign gold bonds open for subscription: Should you buy?

In the futures market, the gold rate touched an intraday high of Rs 42,536 and an intraday low of Rs 41,873 on MCX. For the April series, the yellow metal touched a low of Rs 37,530 and a high of Rs 43,788.

Gold futures for delivery in April rose by Rs 534 or 1.27 percent on the MCX trading at Rs 42,490 per 10 gram in evening trade in a business turnover of 13,895 lots. Gold contracts for June delivery gained Rs 550, or 1.3 percent, at Rs 42,743 per 10 gram in a business turnover of 9,311 lots.

The value of the April contract traded so far is Rs 4,924.43 crore and June contract saw the value of Rs 262.59 crore.

Similarly, Gold Mini contract for April jumped Rs 483, or 1.15 percent at Rs 42,429 in a business turnover of 19,206 lots.

The yellow metal price is trading near the downward slope of resistance line with price expected to trade positive in intraday, sustaining above Rs 42,200. The next leg of the rally would push the price higher towards Rs 42,400-42,500 levels, according to Axis Securities.

Source: Axis Securities

On the hourly chart, price is trading above 60 EMA which is a positive sign with Relative Strength Index (RSI) trading above 60 indicating higher momentum.

The broking advised its clients to buy April Gold at Rs 42,200 level with stoploss at Rs 42,050 and a target of Rs 42,400.

MCX Gold has strong resistance at Rs 42,370-42,400 whereas support is at Rs 42,090-41,910, according to Motilal Oswal.

The brokerage firm said spot gold had intraday support at $1,590-1,585 whereas resistance was at $1,605-1,612.

At 12:57 pm (GMT), spot gold was up $11.93 at $1,602.36 an ounce in London trading.

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