The uncertainty over the US stimulus package and ECB's dovish stance may keep downside limited in gold prices.
Gold prices were steady at 51,441 per 10 gram in the Mumbai market on mixed global cues despite a sell-off in equities and a weaker dollar. The metal, however, ended the week with a gain of Rs 335 or 0.66 percent.
The rate of 10 gram 22-carat gold in Mumbai was Rs 47,120 plus 3 percent GST, while 24-carat 10 gram was Rs 51,441 plus GST. The 18-carat gold quoted at Rs 38,581 plus GST in the retail market.
The Association of Mutual Funds in India (Amfi) data showed that investment in Gold ETF saw an inflow of Rs 908 crore in August. The investment in Gold ETF touched Rs 5,356 crore in the January-August period this year.
The uncertainty over the US stimulus package and dovish stance from the European Central Bank may limit the downside in gold.
The US dollar index measured against a basket of six currencies slipped 0.14 percent to trade at 93.20.
The US Labour Department said the number of Americans filing claims for unemployment benefits stood flat at 884,000 for the week ended September 5, suggesting that the labour market recovery from the coronavirus pandemic was stalling.
MCX iCOMDEX Bullion Index fell 121.32 points, or 0.75 percent, at 16,100.28 at 1728 hours. The index tracks the real-time performance of MCX gold and MCX silver futures.
Navneet Damani, Vice President, Motilal Oswal said, "Gold edged higher in yesterday’s session but gave (up) all of its gains in the latter half of the sessions following a rebound in the dollar... Volatility in gold also remained high after the ECB decided to remain pat on rates and also made no changes in the existing stimulus measures.”
ECB President Christine Lagarde said while the bank was keeping a close eye on the exchange rate, it was not a monetary policy tool, Damani added. "Rally in gold was also triggered following a delay in the development of a vaccine," he added. Damani was talking about the British drugmaker AstraZeneca’s putting on hold trials of its experimental COVID-19 vaccine due to an unexplained illness in a study participant.
"For today, we expect gold on MCX to quote in the range of Rs 51,100 and Rs 51,950. On Comex, the expected range is $1,900 and $1,960," he said.
Comex gold traded lower near $1,952/oz as it gained from morning lows. Gold has witnessed a mixed trade in the last few sessions owing to volatility in the dollar index and US equity market but has managed to hold within a broad range of $1900-2000/oz, Ravindra Rao, VP- Head Commodity Research at Kotak Securities said.
"ETF investors have also moved to the sidelines. Although gold is choppy from the last few sessions, uneven global recovery, rising virus cases, US-China tensions and Brexit uncertainty may support the prices at lower levels," he said .
The gold/silver ratio currently stands at 78.62 to 1, which means the amount of silver required to buy one ounce of gold.
Silver fell Rs 667 to Rs 65,424 per kg from its closing on September 10.
In the futures market, gold touched an intraday high of Rs 51,551 and an intraday low of Rs 51,224 on the MCX. For the October series, the yellow metal touched a low of Rs 45,596 and a high of Rs 56,191.
Gold futures for October delivery slipped Rs 260, or 0.50 percent, at Rs 51,514 per 10 gram in the evening trade on a business turnover of 12,264 lots. The same for December eased Rs 257, or 0.49 percent, at Rs 51,705 on a business turnover of 6,381 lots.
The value of the October and December’ contracts traded so far is Rs 2,517.17crore and Rs 157.86 crore, respectively.
Similarly, Gold-Mini contract for October edged lower Rs 267, or 0.52 percent at Rs 51,565 on a business turnover of 15,602 lots.
On MCX, gold is expected to remain range-bound, having support at Rs 51,200 whereas resistance is at Rs 51,650 level, according to Motilal Oswal.
At 1209 GMT, spot gold was marginally down $1.54 at $1,944.64 an ounce in London trading.For all commodities related news, click here