Gold prices jumped Rs 839 to Rs 41,335 per 10 gram in Mumbai bullion market on a weaker dollar and safe-haven appeal.
The rate of 10 gram 22-carat gold in Mumbai was Rs 37,863 plus 3 percent GST, while 24-carat 10 gram was Rs 41,335 plus GST. The 18-carat gold quoted at Rs 31,001 plus GST in the retail market.
"Gold sales have shrunk 50 percent so far and if every state in the country starts implementing a lockdown due to coronavirus then the trade will be down 90 percent. The upcoming festival of Gudi Padwa, an auspicious day on which people buy gold jewellery, is most likely to be a washout," Surendra Mehta, National Secretary, IBJA told Moneycontrol.
He said only the online bullion business will remain open and customers who prefer to buy gold jewellery can order through the digital channel.
“Gold prices inched higher in yesterday’s session hovering near the $1,500 level. The metal fell more than 1 percent in the earlier sessions as the dollar jumped to multi-year highs and investors continued to sell assets to hoard cash,” said Navneet Damani, Vice President, Motilal Oswal.
US-Iran tensions are on the rise again as the US imposed fresh sanctions on Iran and the latter has not forgotten their general’s death. Joining other central banks, BOE announced one more emergency rate cut and a £200 billion of bond purchases in order to curb the risk amidst the virus outbreak.
The broader trend on Comex could be $1,485-1,535 and on the domestic front, prices could hover in the range of Rs 40,100-41,600, said Damani.
The gold/silver ratio that refers to the amount of silver needed to buy an ounce of gold stood at 111.29 to 1.
In the futures market, gold rate touched an intraday high of Rs 40,948 and an intraday low of Rs 39,838 on MCX. For the April series, the yellow metal touched a low of Rs 37,530 and a high of Rs 44,961.
Gold futures for delivery in April gained Rs 677, or 1.7 percent on the MCX trading at Rs 40,508 per 10 gram in evening trade in a business turnover of 6,177 lots. Gold contracts for June delivery gained Rs 667, or 1.67 percent, at Rs 40,571 per 10 gram in a business turnover of 13,152 lots.
The value of the April contract traded so far is Rs 3,716.98 crore and June contract saw the value of Rs 702.06 crore.
Similarly, Gold Mini contract for April rose Rs 628, or 1.57 percent at Rs 40,517 in a business turnover of 4,887 lots.
Gold prices have given symmetrical triangle pattern break out; price is expected to trade positive. If it sustains above Rs 40,770, the next leg of the rally would push the price higher towards Rs 40,900-41,000 level intraday, according to Axis Securities.
Source: Axis Securities
On hourly chart, the price has started trading above the 9, 21 and 60-EMA which is a positive sign with Relative Strength Index (RSI) trading at 74 indicating high momentum.
The broking firm advised its clients buy April Gold at Rs 40,500 with a stop loss at Rs 40,350 and a target of Rs 40,700.
MCX Gold has intraday resistance at Rs 41,035-41,270 whereas support is placed at Rs 40,425-40,200 levels, according to Motilal Oswal.
The brokerage firm said spot gold has support at $1,488-1475 whereas resistance is at $1,512-1,525.
At 12:40 pm (GMT), spot gold rose $26.63 at $1,499.56 an ounce in London trading.
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