Gold prices fell for the second straight week to settle at Rs 46,806 per 10 gram on rising Treasury yield and firm US dollar. The precious metal has been consolidating in a $50 range for the last month between $1,780-1,830 and a break on either side of the given range will give further direction.
The yellow metal fell in four of the five trading sessions on the MCX and ended the week with a loss of Rs 718 or 1.51 percent. Comex gold, on the other hand, declined $45.15 or 2.46 percent during the week.
The bullion metal has been trading lower than its 5, 20, 50, 100, and 200 days’ simple moving averages and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 43.30, which indicates a weakness in prices and MACD is below the Zero Line, indicating bearishness in the price.
On the domestic front, technically, MCX Gold October faces resistance at Rs 48,431 level and support is at Rs 45,735.
The number of Americans filing new claims for jobless benefits fell by 35,000 to a pandemic low of 310,000 for the week ended September 3.
European Central Bank (ECB) said it will reduce the PEPP (pandemic emergency bond-purchasing program) in the coming quarter that has cushioned the impact of the coronavirus crisis and keep credit cheap in the eurozone.
The spot rupee depreciates by 0.74 percent against the dollar.
The US dollar index rose 0.18 percent to close at 92.64 against the rival currencies, while 10-year US treasury yields jumped to 1.343 percent during the week. The dollar index ended with a gain of 0.66 percent through the week and touched a high of 92.86.
Gold ETF holdings continued weakness as holdings at SPDR Gold Shares stayed below 1,000 tonnes for the second successive week to 998.17 tonnes from the previous week’s 998.52 tonnes last week.
The spot gold/silver ratio currently stands at 75.31 to 1, indicating that gold has outperformed silver.
Gold futures for October delivery slid by Rs 186, or 0.40 percent, to settle at Rs 46,808, with a business turnover of 9,956 lots. The same for the December contract slipped by Rs 187, or 0.40 percent, to Rs 46,996 on a business turnover of 5,284 lots.
Spot gold settled with a loss of $6.97 at $1,787.60 an ounce in London trading.
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