Gold prices climbed by Rs 894 to Rs 51,192 per 10 gram in the Mumbai retail market on a softer dollar and positive global cues, but the gains were capped by a stronger rupee. The precious metal gained on safe-haven demand as nations pushed for lockdowns to contain rising coronavirus cases.
The rate of 10 gram 22-carat gold in Mumbai was Rs 46,892 plus 3 percent GST, while 24-carat 10 gram was Rs 51,192 plus GST. The 18-carat gold quoted at Rs 38,394 plus GST in the retail market.
For the fourth consecutive session, the Comex gold is up amid a rise in global COVID-19 cases and countries pushed for more lockdowns despite vaccine rollouts. The dollar has continued to slip lower after Friday's short-covering. The US Federal Reserve will release the minutes from their latest policy meeting on Wednesday. Amid uncertainty regarding economic recovery, the sentiment is likely to be bullion in January, said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
Gold prices have recovered from support levels keeping a firm trading range over economic growth concerns on worries over a new strain of coronavirus spreading.
The US dollar trades lower at 89.47 or down 0.47 percent against a basket of six currencies. The dollar index has slumped 7 percent in 2020 and hopes of continuing stimulus.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund increased by 0.9 ton to 1,170.74 tonnes.
Spot gold rose by $38.77 at $1,932.58 an ounce at 1203 GMT in London trading.
MCX Bulldesk surged 301 points, or 1.92 percent, at 15,988 at 17:34. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President, Motilal Oswal said, “Gold prices started the new year on a high by notching an eight-week peak, holding above $1,900, as global COVID-19 cases spiked and countries pushed for more lockdowns despite vaccine rollouts. Boris Johnson hints at tougher lockdown restrictions, while Japan considered declaring a state of emergency for capital Tokyo and surrounding areas. Investor focus was also on Tuesday's Georgia runoff elections that will decide the control of the U.S. Senate, and with it, the likely fate of President-elect Joe Biden's legislative agenda.”
The broader trend on COMEX could be in the range of $1885- 1950 and on domestic front prices could hover in the range of Rs 50,400- 51,300.”
The gold/silver ratio currently stands at 74.18 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices soared Rs 2,039 to Rs 69,002 per kg from its closing on January 1.
In the futures market, the gold rate touched an intraday high of Rs 51,222 and an intraday low of Rs 50,300 on the Multi-Commodity Exchange (MCX). For the February series, the yellow metal touched a low of Rs 41,560 and a high of Rs 57,100.
Gold futures for February delivery gained Rs 907, or 1.81 percent, at Rs 51,151 per 10 gram in evening trade on a business turnover of 10,632 lots. The same for April jumped Rs 892, or 1.77 percent, at Rs 51,188 on a business turnover of 3,779 lots.
The value of the February and April’s contracts traded so far is Rs 3,132.53 crore and Rs 285.42 crore, respectively.
Similarly, Gold Mini's contract for February edged higher Rs 889, or 1.77 percent at Rs 51,155 on a business turnover of 12,644 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices surged on dollar decline and fall in real yields. The global count of COVID-19 cases is rising despite vaccine rollouts which have kept risk premium high in bullion prices.
We expect gold prices to trade up with COMEX gold resistance at $1,940, support at $1,910. MCX Gold February support lies at Rs 50,800 with resistance at Rs 51,400.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities
“COMEX gold has gained over 2 percent to trade near $1,936/oz supported by weaker US dollar, US stimulus measures, increased US-China tensions and rising virus cases and more restrictions being imposed to limit the spread. ETF inflows also show a pick-up in investor buying; however, the pace was modest. It seems gold might close above the all-important $1,900/oz mark which might extend the gains till $1,960-1,965/oz.”
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