Gold prices dipped marginally by Rs 92 to Rs 47,953 per 10 gram in the Mumbai retail market on muted global cues and firm rupee. The yellow metal traded in a tight range ahead of Fed Chair Jerome Powell’s speech at Economic Club of New York later tonight.
The rate of 10 gram 22-carat gold in Mumbai was Rs 43,925 plus 3 percent GST, while 24-carat 10 gram was Rs 47,953 plus GST. The 18-carat gold quoted at Rs 35,965 plus GST in the retail market.
The bullion metal was pressured by an upbeat global risk appetite, a slowdown in virus cases globally, and an increase in the pace of vaccination but expectations of a large US economic stimulus and weakness in the dollar capped the downside.
The US dollar trades flat at 90.42, or 0.02 percent against a basket of six currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund decreased by 4.1 tonnes to 1,148.34 tonnes.
While market participants will keep an eye on ECB and BOE's speech scheduled today, the focus will remain on the inflation data expected from the US.
Spot gold was slightly up by $1.54 to $1,839.79 an ounce at 1205 GMT in London trading.
MCX Bulldesk was down 31 points, or 0.20 percent, at 15,175 at 17:37. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President, Motilal Oswal, said: “Gold prices rose to a one-week high as a sliding dollar and hopes of more US fiscal stimulus bolstered its appeal among investors seeking an inflation hedge. US lawmakers have a budget outline to help push US President Joe Biden's $1.9 trillion COVID-19 relief package through Congress without Republican support and the legislation is predicted to pass before March 15. US yields have also retraced from the previous highs, giving some support to the metal prices.”
The broader range on COMEX could be between $1,825 and $1,870, and on the domestic front, prices could hover in the range of Rs 47,750- 48,350.
“Technically, International Gold is trading with positive bias near $1,850 levels. It holds support near $1,830-1,825 levels, above which bullish momentum is likely to continue while resistance is at $1,860-1,870 levels,” said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.
The gold/silver ratio currently stands at 69.51 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices dropped by Rs 965 to Rs 68,983 per kg from its closing on February 9.
In the futures market, the gold rate touched an intraday high of Rs 48,139 and an intraday low of Rs 47,926 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 46,611 and a high of Rs 51,931.
Gold futures for April delivery gained Rs 2, or 0.01 percent, at Rs 47,950 per 10 gram in evening trade on a business turnover of 12,451 lots. The same for June eased Rs 4, or 0.01 percent, at Rs 48,056 on a business turnover of 1,130 lots.
The value of the April and June’s contracts traded so far is Rs 1,754.02 crore and Rs 84.34 crore, respectively.
Similarly, Gold Mini contract for March edged lower by Rs 40, or 0.08 percent at Rs 47,778 on a business turnover of 17,612 lots.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices kept firm trading on US stimulus hopes and dollar decline which kept prices above $1,840 on strong investors’ appetite. The US President Biden said that he agreed with a proposal by Democrat lawmakers that would limit planned $14,000 stimulus payments to higher-income individuals.
We expect gold prices to trade sideways to up with COMEX spot gold support lies at $1,820 and resistance at $1,860. MCX Gold April support lies at Rs 47,800 and resistance lies at Rs 48,200.
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