Gold prices dropped by Rs 116 to Rs 47,089 per 10 gram at the Mumbai retail market on the firm rupee and weak global cues. The precious metal fell Rs 61 or 0.13 percent last week in the domestic market.
The rate of 10 gram 22-carat gold in Mumbai was Rs 43,134 plus 3 percent GST, while 24-carat 10 gram was Rs 47,089 plus GST. The 18-carat gold quoted at Rs 35,317 plus GST in the retail market.
The yellow metal has been trapped in last week trading range amid mixed signals from US Federal Reserve.
Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers said, “On Friday spot Gold ended at $1,781.44 an ounce, marginally higher by $5 or 0.32%, as the dollar declined after the US reported weak set of economic data. The US consumer spending paused in May, while Fed's preferred inflation measure, came in line with expectations at 3.4% against a reading of 3.1% a month prior, the highest since 1992. On the other side, Minneapolis Fed President Neel Kashkari said on Friday he expected recent high inflation readings would not last and Americans would return to the labour market in large numbers in the fall.”
The economic calendar is muted for today although, manufacturing PMI data from major economies and non-farm payroll data from the US is scheduled later this week.
The US dollar jumped to 92, up 0.16 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 1,042.87 tonnes. The ETF has a market value of $59.88 billion.
Spot gold dipped $5.60 to $1,776.72 an ounce at 12:24 GMT in London trading.
MCX Bulldesk modestly rose 18 points or 0.12 percent, at 14,532 at 15:54. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold price traded steady continuing their range bound move from last week, amidst the volatility in the dollar and U.S. Yields and the inflation data which put cold water on fears of an early monetary policy tightening by the Fed. U.S. consumer spending paused in May, while the personal consumption expenditures price index, the Fed’s preferred inflation measure, came in below expectations. Mixed comments from Fed officials regarding the U.S. economy and inflation kept market participants on the edge”, said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
Optimism was witnessed regarding the $1.2 trillion infrastructure bill after President Biden withdrew his threat to veto the measure unless a separate Democratic spending plan also passes Congress, he said.
The broader range on COMEX could be between $1770 - $1795 and on the domestic front, prices could hover in the range of Rs 46,780- Rs 47,280.
“COMEX gold trades flat near $1778/oz. Weighing on the gold price is stable US dollar and equity markets and higher bond yields. Also weighing on price is continuing ETF outflows. However, supporting price is rising virus concerns and mixed economic data from major economies. Gold is struggling to build momentum and unless we see fresh positive triggers or a break past the $1800/oz level, gold may remain sideways,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 69.04 to 1, which means 69.04 ounces of silver is required to buy an ounce of gold.
Silver prices declined by Rs 263 to Rs 68,204 per kg against its closing price on June 25.
In the futures market, the gold rate touched an intraday high of Rs 47,118 and an intraday low of Rs 46,865 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 gained Rs 25, or 0.05 percent, to Rs 46,950 per 10 gram in evening trade on a business turnover of 10,942 lots. The same for October jumped Rs 35, or 0.07 percent, to Rs 47,244 on a business turnover of 3,711 lots.
The value of August and October’s contracts traded so far is Rs 1,641.30 crore and Rs 37.83 crore, respectively.
Similarly, Gold Mini contract for July edged up Rs 49, or 0.10 percent at Rs 46,806 on a business turnover of 10,129 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices traded firm reporting the first weekly gain in last four weeks on US inflation concerns. Gold prices also got support from the worries over rising cases of Delta variant of coronavirus across the globe. The recent US inflation data and COVID worries may support gold prices to keep a firm trading range.
We expect gold prices to trade sideways to up for the day with COMEX gold support at $1765 and resistance at $1800 per ounce. MCX Gold August support lies at Rs 46,800 and resistance at Rs 47,300 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International gold is trading in a choppy manner above support of $1,760-$1,770 levels and may continue to rise till $1,800 levels. On the domestic front, MCX August Gold is trading above the support of Rs 46,800-Rs 46,600 levels. The market has been trading in a rectangle box since last week and we may expect prices to rise and trade near Rs 47,250 levels.
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