Gold inches closer to Rs 47,000 but silver slips

Gold prices extended gains for the eighth consecutive day to hit a new high of Rs 46,928 per 10 gram in the Mumbai bullion market on rupee depreciation but the upside was capped by a stronger dollar.

Major gold-trading centres have remained shut in the country due to the lockdown announced to prevent the spread of coronavirus.

The rate of 10 gram 22-carat gold in Mumbai was Rs 46,986 plus 3 percent GST, while 24-carat 10 gram was Rs 46,928 plus GST. The 18-carat gold quoted at Rs 35,195 plus GST in the retail market.

The United States Mint (Mint) temporarily halted gold and silver bullion production at its West Point facility in New York to reduce the risk of employees’ exposure to coronavirus.

Mint Director David J Ryder said, “The health and safety of the mint workforce is my highest priority. I understand this is an inconvenience to people who were looking forward to seeing how we mint our nation’s coins and medals, but my employees and their well-being are my greatest concern.”

The rise in gold prices saw Thai citizens flocking gold shops to sell the metal in need for cash amid the coronavirus crisis. It forced country’s Prime Minister Prayuth Chan-Ocha to issue a statement asking people to sell gradually as shops could face a cash crunch.

“Gold: MCX Gold Futures is expected to remain bullish in the coming week amid rising deaths owing to the Pandemic coronavirus. Moreover, global crude prices can also find support with negative manufacturing data in the United States for the month of March and rising worries of global recession after the IMF had declared that the world can witness a decline in growth rate by 3 percent. Volatile global equity markets are creating fear in the minds of investors about how long the pandemic would continue," said Sumeet Bagadia, Executive Director, Choice Broking.

However, major upside movement in global prices could be capped amid  a stronger dollar, with a stimulus package news by the Indian government in the coming days, Bagadia added.

“Gold price witnessed a brief fall in the yesterday’s session a day after scaling over seven-year high, as the dollar firmed and investors booked profits, although concerns of a global recession and weaker economic data points put a floor under prices," said Navneet Damani, Vice President, Motilal Oswal.

Central banks around the globe continue to take measures to combat the virus outbreak. US retail sales suffered a record drop in March and output at factories declined by the most since 1946 the COVID-19 impact. Market participants will focus on US weekly jobless claims scheduled today on the calendar.

The broader trend on Comex could be $1,705-1,735 and on the domestic front, prices could hover in the Rs 46,500-47,300 range.

The gold-silver ratio currently stands at 107.75 to 1, which means the amount of silver required to buy an ounce of gold.

Silver prices dropped Rs 450 to Rs 43,550 per kg from its closing on April 16.

In the futures market, gold rate touched an intraday high of Rs 47,327 and an intraday low of Rs 46,526 on MCX. For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,327.

Gold futures for delivery in June gained Rs 540, or 1.16 percent, on the MCX, closing at Rs 47,250 per 10 gram in a business turnover of 17,327 lots. Contracts for August delivery rose Rs 606, or 1.29 percent, at Rs 47,477 per 10 gram in a business turnover of 2,222 lots.

The value of the June contract traded for the day was Rs 2,294.25 crore and August contract saw the value of Rs 126.33 crore.

Similarly, Gold Mini contract for May jumped Rs 517, or 1.11 percent at Rs 47,213 in a business turnover of 9,926 lots.

At 1235 pm GMT, spot gold was up by $16.31 at $1,731.72 an ounce in London trading.

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