Gold hits lifetime high of Rs 40,842 per 10 grams, to get costlier

The rate of 10 gram 22-carat gold in Mumbai was Rs 47,640 plus 3 percent GST, while 24-carat 10 gram was Rs 52,009 plus GST

Gold prices hit a fresh lifetime high to Rs 40,842 per 10 gram, gaining Rs 750 in the Mumbai bullion market as investors scurried to take cover in the safe-haven metal due to escalating tension between the US and Iran.

The precious metal has already gained Rs 1,602 per 10 grams in just the first five days of 2020, most of it clocked after January 3 when a US airstrike killed Iran Quds Force chief Qassem Soleimani.

In the international market, the metal hit a seven-year high. The last high was hit on April 10, 2013.

According to Gajendra Prabu, Technical Research Analyst, HDFC Securities, the weekly chart of gold shows the rally has a strong tone. Price has started moving up in a rising channel indicating a bullish trend, he said, adding, he would maintain bullish stance until $1,610 and take profits from there towards $1650 – 1690 band.

Global brokerage firm Goldman Sachs has maintained its 3, 6 and 12-month forecast for the precious metal at $1,600 per troy ounce as bullion continues to be a better hedge than oil during phases of geopolitical uncertainty, according to a Reuters report.

The rate of 10 grams 22-carat gold in Mumbai was Rs 37,411 plus 3 percent GST, while 24-carat 10 gram was Rs 40,842 plus GST. The 18-carat gold quoted at Rs 30,632 plus GST in the retail market.

The gold/silver ratio that refers to the amount of silver required to buy an ounce of gold stood at 85.16 to 1.

Silver prices gained Rs 625 to 47,955 per kg from its closing on January 3.

In the futures market, gold rate touched an intraday high of Rs 41,096 and an intraday low of Rs 40,250 on MCX. For the February series, the yellow metal touched a low of Rs 36,098 and a high of Rs 41,096.

Gold futures for delivery in February rose Rs 728, or 1.81 percent on the MCX trading at Rs 40,840 per 10 gram in evening trade in a business turnover of 14,940 lots. Gold contracts for April delivery gained Rs 768, or 1.91 percent, at Rs 41,064 per 10 gram in a business turnover of 8,140 lots.

The value of the February contract traded so far is Rs 5,293.58 crore and April contract saw the value of Rs 532.41 crore.

Similarly, Gold Mini contract for February was higher by Rs 737, or 1.84 percent at Rs 40,803 in a business turnover of 12,771 lots.

Axis Securities advised its clients to sell gold at Rs 40,950 with stop loss at Rs 41,100 and target of Rs 40,790.

According to Motilal Oswal, MCX Gold has support at Rs 40,750-40,600 whereas resistance is at Rs 41,100-41,330. It advised clients to buy on dip targeting resistance level of Rs 41,100-41,330.

The brokerage firm expects spot gold to find key support at $1,550 whereas resistance remains at $1,595.

At 1:06 pm (GMT), spot gold was up $25.65 at $1,578.45 an ounce in London trading.