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Gold price slips Rs 271 to Rs 46,336, silver up slightly

The record-buying from gold ETFs and central banks may support positive trade in gold for medium-term, says Tapan Patel of HDFC Securities.

April 27, 2020 / 11:26 PM IST

Gold prices on April 27 slipped Rs 271 to Rs 46,336 per 10 gram in the Mumbai bullion market following a rally in the stock market and a stronger dollar.

Major gold-trading centres continue to be shut across the country due to the lockdown announced to prevent the spread of coronavirus.

The rate of 10 gram 22-carat gold in Mumbai was Rs 42,444 plus 3 percent GST, while 24-carat 10 gram was Rs 46,336 plus GST. The 18-carat gold quoted at Rs 34,752 plus GST in the retail market.

Gold prices traded steady on April 27 with international spot gold traded marginal down near $1,720 with range- bound movement.

Gold prices kept upside limited during the day after Bank of Japan eased its monetary policy by announcing to buy more government bonds, corporate bonds and commercial papers, said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.

Gold futures at MCX for June traded down by nearly Rs 30 at Rs 46,497, witnessing selling pressure from rupee appreciation.

Gold prices have kept upper trading range awaiting fresh cues. The record-buying from gold ETFs and central banks may support positive trade in gold for medium-term, Patel said.

Ravindra Rao, VP- Head Commodity Research, Kotak Securities, said Comex gold traded slightly negative as the price struggled to sustain above $1,750.

Gold has traded in a range for the last few sessions as traders assess the sustainability of current gains. Hopes of more stimulus from global central bankers and robust ETF inflows might continue to support prices.

However, news of reopening of economies following improvement in some virus hotspots may cap the gains.

“Gold prices edged lower as equities firmed, while expectations for more economic stimulus measures limited losses. Investors are pinning their hopes for the reopening of the US economy on the potential for wider availability of testing for COVID-19 cases and on drug trials for treatments of the disease but that said, until there is concrete progress in these areas, further stock market gains may be limited”, said Navneet Damani, Vice President, Motilal Oswal.

This is an important week as many major central bank policies are scheduled.

The broader trend on Comex could be $1,705-1,740 and on domestic front, prices could hover in the range of Rs 46,230-46,730, said Damani.

Also read: Gold price likely to touch Rs 50,000-52,000 in next 3-4 months

The gold/silver ratio currently stands at 110.19 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices gained Rs 20 to Rs 42,050 per kg from its closing on April 24.

Also read: Silver futures up marginally in afternoon trade

In the futures market, gold touched an intraday high of Rs 46,650 and an intraday low of Rs 46,224 on MCX. For the June series, it touched a low of Rs 36,572 and a high of Rs 47,327.

Gold futures for delivery in June slipped Rs 131, or 0.28 percent, on the MCX, trading at Rs 46,396 per 10 gram in evening trade in a business turnover of 15,578 lots. Gold contracts for August delivery eased Rs 147, or 0.31 percent, at Rs 46,550 per 10 gram in a business turnover of 4,266 lots.

The June contract value traded, so far, is Rs 2,628.69 crore and the August contract saw the value of Rs 295.17 crore.

Similarly, Gold Mini contract for June declined Rs 133, or 0.29 percent, at Rs 46,390 in a business turnover of 5,974 lots.

MCX gold is expected to trade in a sideway market having support at Rs 46,000, whereas resistance is at Rs 46,650, according to Motilal Oswal.

The brokerage firm said spot gold will trade in the $1,695-1,735 range.
At 1236 pm GMT, spot gold was down by $11.08 at $1,717.78 an ounce in London trading.

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Sandeep Sinha
first published: Apr 27, 2020 06:35 pm