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Last Updated : May 08, 2020 06:32 PM IST | Source: Moneycontrol.com

Gold price up Rs 428 to Rs 46,292, silver rises Rs 850

The broader trend on Comex could be in the range of $1,688-1,730 and on the domestic front, prices could hover in the Rs 45,900-46,570 range, Navneet Damani of Motilal Oswal says.


A weak US dollar pushed by gold prices by Rs 428 to Rs 46,292 per 10 gram in the Mumbai bullion market on May 8. The metal gained Rs 559, or 1.22 percent, for the week.


The US dollar index, measured against a basket of six currencies, declined 0.16 percent to 99.74.


Major gold-trading centres have remained shut in 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 42,403 plus 3 percent goods and services tax (GST), while 24-carat 10 gram was Rs 46,292 plus GST. The 18-carat gold quoted at Rs 34,719 plus GST in the retail market.


Comex gold continued its positive momentum, which started on May 7 when it rose 2.2 percent.


The US dollar index traded weaker near 99.75 level amid positioning ahead of non-farm payrolls data. Reduced safe-haven buying also weighed on the dollar.


Easing virus restrictions, an improved outlook for the Chinese economy and easing of US-China tensions also boosted the risk sentiment, said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.


Rao said Bloomberg had forecast 22 million decline in US jobs last month. The bleak report largely factored in, the dollar may fall further, which would be positive for gold but only if the drop is bigger than expected.


According to Navneet Damani, Vice President, Motilal Oswal, gold jumped 2 percent after a string of weak economic data, including surging unemployment in the US, heightened fears of a coronavirus-induced global downturn, while investors turned their attention to nonfarm payrolls for further cues.


The host of gloomy economic data bolstered expectations of more stimulus measures from central banks and governments around the world to cushion economic damage from the virus.


Also on investors' radar are developments surrounding US-China trade as the Trump administration weighs punitive actions against Beijing over its handling of the outbreak.


The broader trend on Comex could be in the range of $1,688-1,730 and on the domestic front prices could hover in the Rs 45,900-46,570 range, Damani said.


The gold/silver ratio currently stands at 108.66 to 1, which means the amount of silver required to buy one ounce of gold.


Silver prices rose Rs 850 to Rs 42,600 per kg from its closing on May 6.


In the futures market, gold touched an intraday high of Rs 46,377 and an intraday low of Rs 45,934 on MCX.


For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,327.


Gold futures for delivery in June slipped Rs 53, or 0.11 percent, on the MCX, trading at Rs 46,108 per 10 gram in the evening in a business turnover of 13,592 lots.


Gold contracts for August lowered by Rs 90, or 0.19 percent, at Rs 46,289 per 10 gram in a business turnover of 7,136 lots.


The value of the June contract traded, so far, is Rs 2,336.32 crore and August contract Rs 194.60 crore.


Similarly, Gold Mini contract for June eased Rs 63, or 0.14 percent, at Rs 46,084 in a business turnover of 10,222 lots.


Tapan Patel, Senior Analyst (Commodities), HDFC Securities expect prices to trade sideways to up for the day, with MCX Gold June support at Rs 45,900 and resistance at Rs 46,500.


MCX gold is expected to trade positively with support at Rs 45,900 level and intermediate support at Rs 46,150 level, according to Motilal Oswal. The brokerage firm advised clients to buy on dip targeting higher resistance at Rs 46,500-46,800 levels.


The broking said spot gold to trade in a range of $1,705-1,740 range.


At 1227 GMT, spot gold was up by $1.53 at $1,718.12 an ounce in London trading.

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First Published on May 8, 2020 06:32 pm
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