Gold prices dip marginally by Rs 66 to Rs 46,929 per 10 gram in the Mumbai bullion market on May 29 on a stronger rupee but the downside was capped by increasing tensions between the US and China over Hong Kong.
The disappointing US job market numbers also supported gold prices to trade firm with economic growth concerns and fall in equity indices.
Market participants are likely to take a further cue from US President Donald Trump’s likely announcement of a new policy on Hong Kong later in the day after China passed a national security law that curbed citizen's freedom.
The rate of 10 gram 22-carat gold in Mumbai was Rs 42,987 plus 3 percent GST, while 24-carat 10 gram was Rs 46,929 plus GST. The 18-carat gold quoted at Rs 35,197 plus GST in the retail market.
According to Navneet Damani, Vice President, Motilal Oswal, gold prices edged lower though losses were capped as the China-US rift deepened over moves by Beijing to impose a security law on Hong Kong, lifting the allure of safe havens amid market uncertainties caused by the pandemic.
Trump's top economic adviser warned that Hong Kong, which enjoys special privileges, may now need to be treated like China when it comes to trade and other financial matters.
After disappointing US GDP, market participants will keep an eye on the GDP number expected on the domestic front.
The Broader trend on Comex could be in the range of $1,690-1,730 and on the domestic front, prices could hover in the range of Rs 46,030-46,900.
Ravindra Rao, VP-Head Commodity Research, Kotak Securities, said the commodity traded mixed in the international market as market players are on sidelines ahead of an expected press conference by Trump on China as well as Fed Chairman’s comments on US economy.
Weaker risk sentiment is evident from losses in equity markets. European equity markets were down over 1 percent while DJIA futures were down over 100 points.
The US dollar index hit a low of 98.09, the lowest since March 17, supporting the yellow metal. Gold might be choppy ahead of Trump and Fed Chairman’s statements.
The gold/silver ratio currently stands at 96.89 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices rose Rs 530 to Rs 48,435 per kg from their closing on May 28.
In the futures market, gold touched an intraday high of Rs 46,714 and an intraday low of Rs 46,394 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,980.
Gold futures for June delivery gained Rs 295, or 0.64 percent, at Rs 46,700 per 10 gram in evening trade on a business turnover of 2,431 lots. The same for August delivery jumped by Rs 363, or 0.78 percent, at Rs 46,856 on a business turnover of 14,831 lots.
The value of the June and August contracts traded so far is Rs 1,725.73 crore and Rs 1,262.79 crore, respectively.
Similarly, Gold Mini contract for June increased Rs 232, or 0.50 percent, at Rs 46,706 on a business turnover of 4,385 lots.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities, expects gold to trade sideways to up with MCX Gold August support at Rs 46,400, resistance at Rs 47,000.
At MCX, gold is expected to trade positively with support at Rs 46,350 and intermediate support at Rs 46,500 level, according to Motilal Oswal.
The broking firm advised its clients to buy on dips targeting higher resistance at Rs 46,800-47,000 zone.
The brokerage firm said spot gold is expected to trade in a range of $1,710-1,740 range with positive bias.
At 1214 GMT, spot gold was up by $9.04 at $1,728.26 an ounce in London trading.For All Commodities Related News - Click Here