Gold prices rose by Rs 225 to Rs 49,031 per 10 gram at Mumbai retail market on rupee depreciation and lacklustre global cues. The yellow metal was pressured by an uptick in the dollar, ETF outflow and weak consumer demand in India.
The rate of 10 gram 22-carat gold in Mumbai was Rs 44,912 plus 3 percent GST, while 24-carat 10 gram was Rs 49,031 plus GST. The 18-carat gold quoted at Rs 36,773 plus GST in the retail market.
Market participants’ focus this week will be on the U.S. consumer price index report that could shed more light on the Federal Reserve’s near-term policy decision.
The US dollar rose to 90.07, up 0.14 percent against a basket of six rival currencies. The stronger greenback makes bullion metal less attractive for other currency holders.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell by 5.8 tonnes to 1,037.33 tonnes. The ETF has a market value of $62.97 billion.
Spot gold was flat at $1,899.34 an ounce at 12:09 GMT in London trading.
MCX Bulldesk increased 26 points or 0.17 percent, at 15,256 at 17:40. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices continue to hover around the $1,900, amidst the volatility in U.S. Dollar and Yield. Positive economic data last week and comments from U.S. Treasury Secy Yellen regarding the $4tln budget plan, underplaying the inflation, has weighed on the metal prices. Japan’s economy shrank at a slower than initially reported pace in Q1; whereas UK economic data is showing some strength after relaxation in the lockdown measures was announced”, said Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services.
The broader range on COMEX could be between $1,883-1,908 and on the domestic front, prices could hover in the range of Rs 48,850- 49,250.
The gold/silver ratio currently stands at 68.73 to 1, which means 68.73 ounces of silver is required to buy an ounce of gold.
Silver prices soared by Rs 581 to Rs 71,331 per kg against its closing price on June 7.
In the futures market, the gold rate touched an intraday high of Rs 49,275 and an intraday low of Rs 49,010 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 44,501 and a high of Rs 49,721.
Gold futures for August delivery gained Rs 112, or 0.23 percent, to Rs 49,225 per 10 gram in evening trade on a business turnover of 11,934 lots. The same for October jumped Rs 104, or 0.21 percent, to Rs 49,525 on a business turnover of 2,274 lots.
The value of August and October’s contracts traded so far is Rs 1,378.33 crore and Rs 82.56 crore, respectively.
Similarly, Gold Mini contract for July advanced by Rs 99, or 0.20 percent at Rs 49,010 on a business turnover of 14,856 lots.
Trading Strategy
Axis Securities
MCX Gold price is trading inside the ascending triangle pattern, price is expected to trade positively. Any breakout above Rs 49,250 would push the price higher towards Rs 49,500-49,600 levels in intraday.
The price has started trading above 9, 21 and 60 hourly EMA which is a bullish sign.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices witnessed a decline after gaining above $1900 per ounce in the last trading session on dollar decline and fall in US treasury yields. Gold prices resumed downside as traders and investors are waiting for fresh cues from US CPI data to gauge the inflation picture. The dollar index was up by 0.24% by the noon session adding pressure to the yellow metal.
We expect gold prices to trade sideways to down for the day with COMEX gold support at $1870 and resistance at $1910 per ounce. MCX Gold August support lies at Rs 48,700 and resistance at Rs 49,300 per 10 gram.
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