Gold prices were steady at Rs 44,880 per 10 gram in the Mumbai retail market on rupee depreciation and lacklustre global trend. The yellow metal was pressured by the surging US dollar but the downside was capped by COVID restrictions placed in many European countries and other parts of the world.
The bullion metal has been trading in a narrow range in the past few days amid a lack of fresh of trigger.
The rate of 10 gram 22-carat gold in Mumbai was Rs 41,110 plus 3 percent GST, while 24-carat 10 gram was Rs 44,880 plus GST. The 18-carat gold quoted at Rs 33,660 plus GST in the retail market.
The US dollar trades higher at 92.65, or up 0.13 percent against a basket of six rival currencies on safe-haven appeal. The dollar index hit a fresh high of 92.72 during the intraday, the highest level since November 16.
The US 10-year treasury yields currently stand at 1.60 percent, down 1 basis point. The yields have come off the highs amid disappointing economic data, the selloff in crude oil price easing inflation concerns and Fed’s dovish stance.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, decreased by 2.3 tonnes to 1043.03 tonnes.
Spot gold eased by $7.36 to $1,727.34 an ounce at 1217 GMT in London trading.
MCX Bulldesk decreased 100 points or 0.71 percent, at 14,063 at 17:48. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President, Motilal Oswal said, “Gold prices were steady as support from easing US Treasury yields was offset by a strong dollar, which emerged as a preferred safe-haven amid growing concerns about the rising cases of COVID-19 and restrictions being imposed globally to curb the spread of the same. Fed officials in their speech mentioned that they are not looking for any kind of rate hike until and unless they see an actual improvement in the economy.”
“On the data front, new orders for key US-made capital goods and shipments unexpectedly fell in February, hence supporting the metal. Market participants will keep an eye on the US weekly jobless claims data, which if reported better than expectations it could further support bullion.”
The broader range on COMEX could be between $1720 and $1765 and on the domestic front, prices could hover in the range of Rs 44,500-45,100.
The gold/silver ratio currently stands at 69.81 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices dropped by Rs 819 to Rs 64,281 per kg from its closing on March 24.
In the futures market, the gold rate touched an intraday high of Rs 44,897 and an intraday low of Rs 44,622 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 44,150 and a high of Rs 51,931.
Gold futures for April delivery slipped by Rs 204, or 0.45 percent, at Rs 44,645 per 10 gram in evening trade on a business turnover of 6,556 lots. The same for June fell Rs 168, or 0.37 percent, at Rs 45,108 on a business turnover of 9,623 lots.
The value of the April and June’s contracts traded so far is Rs 1,873.03 crore and Rs 297.46 crore, respectively.
Similarly, the Gold Mini contract for April slumped Rs 154, or 0.34 percent at Rs 44,687 on a business turnover of 16,962 lots.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices have kept a firm trading range supported by pandemic worries. The delayed trade activities due to transport blockage in the Suez Canal also boosted buying.
We expect gold prices to trade sideways to down for the day with COMEX spot gold support lies at $1,710 and resistance at $1,745. MCX Gold April support lies at Rs 44,500 and resistance lies at Rs 45,000.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
International gold prices are trading with bearish momentum, where resistance is at $1,740-1,745 levels. Prices are sustaining above support of $1,720-1,725. On the MCX, prices tested the support of Rs 44,700-44,600 levels and bounced back from there. We may expect prices to rise and trade near Rs 44,900 level in the upcoming session.
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