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Gold price surges above Rs 45,000 per 10 gram as dollar, Treasury yields dip

The spot gold-silver ratio currently stands at 66.04 to 1, indicating that silver has outperformed gold.

Mumbai / March 11, 2021 / 07:26 PM IST

Gold prices edged higher to Rs 45,104 per kg on March 11 tracking a positive global trend as US Treasury yields and dollar slipped on weak inflation data. The yellow metal gained as the US Congress approved a $1.9 trillion COVID-19 relief bill, increasing the safe-haven appeal.

The commodity market in India was shut in the first half of the session on account of the Mahashivratri holiday.

The retail gold price settled at Rs 44,680 per 10 gram in the Mumbai retail market yesterday. The rates for 18, 22 and 24 carat gold were Rs 33,510, Rs 40,927 and Rs 40,927 respectively, plus 3 percent GST. 

The bullion metal traded in the green after a gap-up start in the evening session.

The precious metal has been trading lower than 20, 50, 100 and 200 days’ moving averages but lower than the 5-day moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 37.74 which indicates bearish momentum in prices.

The European Central Bank said it would "significantly" step up the pace of its pandemic emergency bond buys to calm market jitters concerning a recent rise in government bond yields.

The US dollar index traded lower at 91.59, down 0.25 percent in the evening trade against the major cross. While the Benchmark 10-year US T-bond yield eased to 1.49 percent.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell by 1.75 tonnes to 1,060.23 tonnes. The ETF has a market value of $58.49 billion.

Spot gold rose $6.75 to $1,733.43 an ounce at 1321 GMT in London trading.

MCX Bulldesk increased 77 points or 0.54 percent, at 14,353 at 17:43. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

The spot gold-silver ratio currently stands at 66.04 to 1 indicating that silver has outperformed gold.

“Gold futures are trading firm after taking horizontal support from eased Treasury yields. The drop in yields also dragged the US dollar lower, giving more confidence to gold buyers. Gold MCX is back above Rs 45,000 and is likely to touch Rs 45,600 levels in short term,” said Kshitij Purohit, CapitalVia Global Research Limited

In the futures market, the gold rate touched an intraday high of Rs 45,167 and an intraday low of Rs 44,950 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 gained by Rs 312, or 0.70 percent, at Rs 45,104 per 10 gram in evening trade on a business turnover of 10,944 lots. The same for June soared Rs 284, or 0.63 percent, at Rs 45,376 on a business turnover of 6,239 lots.

The value of the April and June’s contracts traded so far is Rs 664.02 crore and Rs 64 crore, respectively.

Similarly, Gold Mini contract for April jumped Rs 321, or 0.72 percent at Rs 45,095 on a business turnover of 25,269 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices rallied after US bond yields declined and the dollar index fell on inflation fears.

We expect gold prices to trade sideways to up for the day with COMEX spot gold support lies at $1710 and resistance at $1740. MCX Gold April support lies at Rs 44,800 and resistance lies at Rs 45,300.

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first published: Mar 11, 2021 07:26 pm