Gold prices jumped Rs 384 to Rs 40,848 per 10 grams in Mumbai's bullion market over rupee depreciation and increased demand due to the wedding season.
The yellow metal also edged higher after the US Federal Reserve kept interest rate unchanged and said that the coronavirus outbreak could hurt China’s economy in the short term.
The rate of 10 grams, 22-carat gold in Mumbai was Rs 37,417 plus 3 percent GST, while 10 grams, 24-carat was Rs 40,848 plus GST. The price of 18-carat gold quoted at Rs 30,636 plus GST in the retail market.
According to Navneet Damani, Vice President, Motilal Oswal, gold prices rose after the Federal Reserve, in line with expectations, held rates unchanged, and said that the new coronavirus outbreak could hurt China’s economy in the short term.
The Fed held its rate steady on January 29, with Fed Chair Jerome Powell pointing to continued moderate economic growth, and a “strong” job market, giving no sign of any imminent changes in borrowing costs.
The sharp rise in gold price in second half of 2019 cut global demand for jewellery by 6 percent to 2,107 tonnes, said the World Gold Council on January 30. It also said that India’s gold demand fell by 9 percent to 544.6 tonnes in 2019, as compared to 598 tonnes in 2018 on record-high prices, reduced retail buying and the ongoing economic slowdown.
The gold/silver ratio, which is the amount of silver required to buy one ounce of gold. currently stands at 88.47 to 1.
Silver prices jumped Rs 635 to Rs 46,170 per kg from its closing on January 29.
In the futures market, gold rates touched an intraday high of Rs 40,802, and an intraday low of Rs 40,472 on the MCX. For the February series, the yellow metal touched a low of Rs 36,098 and a high of Rs 41,293.
Gold futures for delivery in February gained Rs 430, or 1.07 percent on the MCX trading at Rs 40,780 per 10 gram in evening trade for a business turnover of 1,975 lots.
Gold contracts for delivery in April rose Rs 338, or 0.83 percent, at Rs 40,913 per 10 gram in a business turnover of 19,464 lots. The contract for June were trading up by Rs 334, or 0.82 percent, at Rs 40,963 per 10 grams with a business volume of 3,831 lots.
The total value of the February contracts traded so far is Rs 1,638.77 crore and that of contracts for April saw a value of Rs 2,811.82 crore.
Similarly, Gold Mini contracts for March gained Rs 310, or 0.77 percent at Rs 40,747 in a business turnover of 4,682 lots.
MCX Gold has support at Rs 40,480-40,350, whereas resistance is at Rs 40,820-40,970. Sideways to positive movement is expected for the day, according to Motilal Oswal. The broking firm advised its clients to buy on dips and targeted resistance from Rs 40,820-40,970.
The brokerage firm said spot gold has key support at $1,560 whereas resistance is at $1,600.
At 12:44 pm (GMT), spot gold was up $3.71 at $1,580.43 an ounce in London trading.