Gold prices dropped by Rs 268 to Rs 47,903 for 10 grams in the Mumbai bullion market on profit-booking amid positive economic data and volatility in the global market.
The precious metal extended fall as firmer US treasury yields and expectations that the Federal Reserve and other central banks may finally announce the unwinding of economic support.
The price of 10 gram 22-carat gold in Mumbai was Rs 43,879 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,903 plus GST. The 18-carat gold quoted at Rs 35,927 plus GST in the retail market.
The focus this week will be on major central bank meetings, including those of the Bank of Japan and the European Central Bank scheduled on October 28.
“Gold prices traded under pressure on volatile bond yields following positive US economic data. The improved US consumer confidence pressured gold prices to trade weak with Fed rate hike speculation. The traders and investors are awaiting an outcome from Bank of Japan and ECB policy meetings on Thursday”, said Tapan Patel- Senior Analyst (Commodities), HDFC securities.
Patel expects gold to trade sideways to down with Comex spot gold resistance at $1,800 and support at $1,775 per troy ounce. MCX Gold December support lies at Rs 47,400 and resistance at Rs 48,000.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 1.74 tonnes to 979.81 tonnes. The ETF has a market value of $56.23 billion.
The dollar index dipped to 93.77, down 0.18 percent against a basket of six rival currencies.
Spot gold was unchanged at $1,792.62 ounce at 1251 GMT in London trading.
MCX Bulldek increased by 29 points or 0.20 percent to 14,409 at 6.22 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
The gold-silver ratio stands at 74.18 to 1, which means 74.18 ounces of silver is required to buy an ounce of gold.
Silver prices dropped Rs 879 to Rs 64,574 a kg against its closing price on October 26.
In the futures market, the gold price touched an intraday high of Rs 47,963 and an intraday low of Rs 47,620 on MCX. For the December series, the yellow metal touched a low of Rs 45,705 and a high of Rs 48,899.
Gold futures for December delivery gained Rs 71, or 0.15 percent, at Rs 47,884 in the evening trade on a business turnover of 10,608 lots. The same for February soared by Rs 58, or 0.12 percent, to Rs 47,975 on a business turnover of 3,744 lots.
The value of December and February contracts traded is Rs 1,654.65 crore and Rs 97.06 crore, respectively.
The Gold Mini contract for November edged up by Rs 80, or 0.17 percent, at Rs 47,760 on a business turnover of 5,365 lots.
Trading Strategy
Axis Securities
Axis Securities advised its clients to sell December Gold at Rs 47,800 with a stop loss at Rs 48,000 and a target of Rs 47,550.
Motilal Oswal
MCX Gold is likely to trade with a positive bias for the session, with support placed at Rs 47,500-47,300. Resistance is at Rs 48,000-48,200.
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