Gold glitters at record high of Rs 47,067, silver also surges Rs 2,050

Gold prices extended gains for the fifth consecutive day to hit a new high of Rs 47,067 per 10 gram on May 15 in the Mumbai bullion market on weak dollar but the upside was capped by a stronger rupee.

The metal also got support from talks of another US stimulus, deterioration in US-China relation, weak economic data and fear of second wave of coronavirus pandemic and warnings that it may not get over soon.

Gold had hit a new high on April 16 when the price touched 46,928 per 10 gram. The bullion metal prices gained Rs 1,285, or 2.80 percent during the week.

The rate of 10 gram 22-carat gold in Mumbai was Rs 43,113 plus 3 percent GST, while 24-carat 10 gram was Rs 47,067 plus GST. The 18-carat gold quoted at Rs 35,300 plus GST in the retail market.

“There are seven wedding dates in June, 70 percent of customers visiting stores are for buying wedding jewellery. Also those who booked gold online during Akshay Tritiya, they are also visiting. Online advance booking is happening. Delivery will start after guidelines given by government,” said Suvankar Sen, Executive Director, Senco Gold and Diamonds.

Ravindra Rao, VP-Head, Commodity Research, Kotak Securities, said Comex gold traded flat near $1,740/oz. Early gains were pared due to risk on as market players focused on hopes of additional stimulus, reopening of major economies and improvement in Chinese economic data. However, health of major economies, US-China tensions and increasing fear of a second wave of infection weighed on sentiment .

Although gold rose to $1,748/oz, the upper bound resistance of $1,750 needs to be penetrated if the bulls want to keep the price higher.

According to Navneet Damani, Vice President, Motilal Oswal, gold rose to hover below a three-week high hit in the previous session, underpinned by talks of US stimulus and worsening US-China relations.

US President Donald Trump is open to another possible stimulus bill, but not the one put forward by House of Representatives Democrats, a White House spokeswoman said.

Trump also signalled a further deterioration of his relationship with China over the virus, saying he had no interest in speaking to President Xi Jinping and going so far as to suggest he could even cut ties with Beijing.

Market participants will keep an eye on the GDP numbers expected from EU and the US; a weaker-than-expected data could lend support to gold prices.

The broader trend on Comex could be in the range of $1,725-1,750 and on the domestic front, prices could hover in the Rs 46,550-47,150 range.

The gold/silver ratio stands at 104.51 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices gained Rs 2,050 to Rs 45,035 per kg from its closing on May 14.

In the futures market, gold touched an intraday high of Rs 46,984 and an intraday low of Rs 46,641 on MCX. For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,327.

On the MCX, gold futures for June delivery gained Rs 321, or 0.69, percent at Rs 46,975 per 10 gram in the evening trade in a business turnover of 13,231 lots. Gold contracts for August delivery jumped Rs 323, or 0.69 percent, at Rs 47,170 per 10 gram in a business turnover of 8,954 lots.

The value of the June contract traded, so far, is Rs 2,244.77 crore and the August contract saw the value of Rs 311.02 crore.

Similarly, Gold Mini contract for June rose Rs 339, or 0.73 percent, at Rs 46,970 in a business turnover of 10,810 lots.

Tapan Patel, Senior Analyst (Commodities), HDFC Securities, said gold futures at MCX for June rallied Rs 233 to Rs 46,887 supported by overnight rally in international gold prices.

Gold prices witnessed safe-haven buying on gloomy economic outlook. The weak job numbers from the US and expectations of more stimulus triggered buying in precious metals.

Patel expect prices to trade up, with MCX Gold June support at Rs 46,500, resistance at Rs 47,100.

MCX Gold is expected to trade positively with support at Rs 46,550 and intermediate support at Rs 46,750, according to Motilal Oswal. The brokerage advised clients to buy on dip, targeting higher resistance in the Rs 47,050-47,250 zone.

The broking firm said spot gold would trade in the $1,715-1,755 range.

At 1222 GMT, spot gold was down by $3.55 at $1,734.01 an ounce in London trading.

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