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Gold price eases marginally to Rs 49,218/10 gm on softer rupee, increased risk appetite

The broader range on COMEX could be between $1,886-$1,910 and on the domestic front, prices could hover in the range of Rs 49,100 - Rs 49,700.

Mumbai / June 02, 2021 / 06:57 PM IST
The value of August and October’s contracts traded so far is Rs 1,805.15 crore and Rs 59.38 crore, respectively.

The value of August and October’s contracts traded so far is Rs 1,805.15 crore and Rs 59.38 crore, respectively.

Gold prices dipped by Rs 101 to Rs 49,218 per 10 gram at Mumbai retail market on continued weakness in the rupee and lacklustre global trend. The yellow metal retreated on better-than-expected US economic data, steady Treasury yield, firm dollar and increased risk appetite.

The rate of 10 gram 22-carat gold in Mumbai was Rs 45,084 plus 3 percent GST, while 24-carat 10 gram was Rs 49,218 plus GST. The 18-carat gold quoted at Rs 36,914 plus GST in the retail market.

In the absence of any major data today, market participants' focus this week will be on US payrolls data due on Friday for further clarity on economic recovery and near-term Federal Reserve policy action. Since strong economic data has supported a rebound in the US dollar, the yellow metal may fall during the intraday.

The US dollar strengthened to 90.05, up 0.26 percent against a basket of six rival currencies. The stronger greenback makes bullion metal less attractive for other currency holders.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund rose 2.62 tonnes to 1,045.83 tonnes. The ETF has a market value of $63.84 billion.

Close

Spot gold was modestly jumped by $4.91 to $1,905.36 an ounce at 12:41 GMT in London trading.

MCX Bulldesk increased 42 points or 0.27 percent, at 15,358 at 18:12. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold prices edged lower from a near five-month high marked in the earlier session, amidst positive US economic data and an uptick in bond yields weighed on the safe-haven metal. The US 10-year Treasury yield rose to a more than one-week high breaching the 1.6 marks. An uptick in US manufacturing activity was witnessed in May as pent-up demand in a reopening economy boosted orders. Strong US manufacturing data prompted the investors to shift back into riskier assets”, said Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services.

The broader range on COMEX could be between $1,886-$1,910 and on the domestic front, prices could hover in the range of Rs 49,100-Rs 49,700. 

“COMEX gold continues to trade in a narrow range near $1900/oz. Gold is choppy near $1900/oz reflecting volatility in the US dollar and equity market as market players assess monetary policy amid economic growth and rising inflation pressure. ETF inflows indicated some buying interest from investors; however, this is countered by weaker consumer demand in India owing to virus related restrictions. Gold may witness choppy trade along with US dollar and equity market however general bias may be on the upside until US dollar recovers significantly”, said Ravindra Rao, CMT, EPAT, VP-Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 68.98 to 1, which means 68.98 ounces of silver is required to buy an ounce of gold.

Silver prices tumbled by Rs 1,062 to Rs 71,351 per kg against its closing price on June 1.

In the futures market, the gold rate touched an intraday high of Rs 49,642 and an intraday low of Rs 49,301 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 44,501 and a high of Rs 49,721.

Gold futures for August delivery surged Rs 195, or 0.39 percent, to Rs 49,620 per 10 gram in evening trade on a business turnover of 12,652 lots. The same for October gained Rs 251, or 0.50 percent, to Rs 50,009 on a business turnover of 815 lots.

The value of August and October’s contracts traded so far is Rs 1,805.15 crore and Rs 59.38 crore, respectively.

Similarly, Gold Mini contract for July edged higher by Rs 160, or 0.33 percent at Rs 49,339 on a business turnover of 12,992 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices traded marginally lower on risk-on sentiments on strong economic data from the US. The stronger than expected US manufacturing PMI pressured bullion prices with gold falling from five-month highs. The dollar index was trading 0.25% higher during the day.

We expect gold prices to trade sideways to lower for the day with COMEX gold support at $1880 and resistance at $1920 per ounce. MCX Gold August support lies at Rs 49,200 and resistance is seen at Rs 49,800 per 10 gram.

Axis Securities

Axis Securities Axis Securities

MCX Gold price is trading under an ascending triangle pattern, price is expected to trade positively. Any breakout above Rs 49,670 would push the price higher towards Rs 49,850-Rs 50,000 levels in intraday. It has been trading above 100 SMA which is a bullish sign.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited

Technically, International Gold is trading with negative bias near $1,900 levels and may continue to decline and test the support of $1,892-1,885 levels. On the MCX, Gold August price is trading with a positive bias and prices are sustaining above 50-SMA and we may expect them to rise during the upcoming session and trade near Rs 49,700.
Sandeep Sinha

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