Gold price edged higher for the second straight day on February 23 by Rs 268 to Rs 46,917 per 10 gram in the Mumbai retail market, tracking Monday’s sharp gains in the international market. The yellow metal traded in a sideways range as firm US dollar and surging Treasury yield pushed gold to lower levels whereas upside movement is fueled by the discovery of new strains of coronavirus.
The rate of 10 gram 22-carat gold in Mumbai was Rs 42,976 plus 3 percent GST, while 24-carat 10 gram was Rs 46,917 plus GST. The 18-carat gold quoted at Rs 35,188 plus GST in the retail market.
The US 10-year bond yield currently stands at 1.37 percent. While the US dollar trades firm at 90.12, or 0.14 percent against a basket of six currencies.
Market participants will also keep an eye on the US Consumer Confidence data scheduled later in the day. Investors also await the testimony of US Federal Reserve Chairman Jerome Powell on the Semiannual Monetary Report to Congress later today.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund dropped by 12.2 tonnes to 1,115. 4 tonnes.
Spot gold was marginally higher by $1.27 to $1,810.97 an ounce at 1208 GMT (05:38 PM IST) in London trading.
MCX Bulldesk fell slightly by 11 points or 0.07 percent, to 15,016 at 17:39 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President at Motilal Oswal Financial Services (MOFSL) said, “Gold prices continue to edge higher, as US Treasury yields eased from a near one-year peak, lifting the appeal of bullion. US President Joe Biden launched changes to the US coronavirus aid program for small businesses to try to reach smaller and minority-owned firms. The rise in the number of people affected and the number of deaths from COVID-19 globally is also supporting bullion. The US crossed the staggering milestone of 500,000 COVID-19 deaths.
The broader range on COMEX could be between $1800- 1830 and on the domestic front prices could hover in the range of Rs 46,820- Rs 47,300.”
“COMEX gold trades marginally higher near $1809/oz supported by increased inflation concerns, weaker US dollar, correction in Bitcoin price and prospect of additional US stimulus. However, weighing on price is higher bond yields, continuing ETF outflows and general improvement in global economic outlook. Gold has rallied sharply after managing to hold $1750/oz while a break above $1800/oz has paved way for more gains however the momentum may slowdown if US bond yields continue to remain high”, Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 67.28 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices jumped by Rs 360 to Rs 69,730 per kg from its closing on February 22.
In the futures market, the gold rate touched an intraday high of Rs 46,985 and an intraday low of Rs 46,750 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 45,861 and a high of Rs 51,931.
Gold futures for April delivery gained Rs 31, or 0.07 percent, at Rs 46,932 per 10 gram in evening trade on a business turnover of 13,094 lots. The same for June increased by Rs 28, or 0.06 percent, at Rs 47,050 on a business turnover of 2,557 lots.
The value of the April and June’s contracts traded so far is Rs 1,985.30 crore and Rs 31.48 crore, respectively.
Similarly, Gold Mini contract for March rose by Rs 15, or 0.03 percent to Rs 46,797 on a business turnover of 15,541 lots.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices witnessed recovery on weaker dollar and pandemic worries. The traders and investors are focusing on US stimulus hopes and Fed Chairman Jerome Powell’s testimony later tonight.
We expect gold prices to trade sideways to upwards with COMEX spot gold support staying at $1790 and resistance at $1820. MCX Gold April support lies at Rs 46,500 while resistance is seen at Rs 47,200.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
International Gold is trading with a marginal negative bias after testing the resistance level of $1,812-1,817. We may expect bulls to dominate the evening session if prices trade above $1,800 levels. MCX April Gold has been trading in a marginal sideways trend. Bullish momentum is likely to persist above Rs 46,600-46,800 levels whereas resistance is at Rs 47,100-47,200 levels.
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