In the futures market, gold touched an intraday high of Rs 47,050 and an intraday low of Rs 46,601 on the MCX
Gold prices slipped Rs 274 to Rs 46,986 per 10 gram in the Mumbai bullion market on the back of a stronger rupee versus the dollar.
The precious metal eased a bit in early trade as equities gained on hopes for a swift recovery from the coronavirus-induced economic slump, although losses were capped by optimism over further stimulus measures.
The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 35,240, Rs 43,039, and Rs 46,986, respectively, plus 3 percent GST.
In economic cues, minutes of the Federal Reserve policy meeting showed that members acknowledged the possibility of further support measures if the downturn persists.
On the data front, EU and UK inflation fell to its lowest in nearly four years, bolstering the prospects of more stimulus from the central bank. Market participants will keep their eyes on the preliminary PMI numbers from major economies. Weaker-than-expected numbers could lend further support to gold.
In the futures market, gold touched an intraday high of Rs 47,050 and an intraday low of Rs 46,601 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,980.
Gold futures for June delivery declined Rs 333, or 0.71 percent, at Rs 46,798 per 10 gram in evening trade on a business turnover of 9,929 lots. The same for August delivery edged lowered Rs 374, or 0.79 percent, at Rs 46,966 on a business turnover of 10,761 lots.
The value of the June and August contracts traded so far is Rs 2,641.04 crore and Rs 494.45 crore, respectively.
The gold/silver ratio currently stands at 98.99 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices eased Rs 655 to Rs 47,465 per kg from its closing on May 20.
Similarly, Gold Mini contracts for June eased Rs 324, or 0.69 percent at Rs 46,905 on a business turnover of 8,826 lots.
On the technical charts, the yellow metal is trading below its 9, 21 and 60-day Exponential Moving Average (EMA), which is a bearish sign. The Relative Strength Index (RSI) is trading at 28, indicating lower momentum.
Axis Securities sees gold trading lower if Rs 46,700 levels are taken out. "It would drag price lower towards Rs 46,500-46,400 levels intraday."
Motilal Oswal too shares Axis Securities' view. It expects gold to trade with a negative bias with resistance at Rs 47,000 and intermediate resistance at Rs 46,800 levels.
Going forward, Navneet Damani, Vice President, Motilal Oswal, sees domestic gold prices trading in the Rs 46,500-47,200 range.
However, Ravindra Rao, VP-Head Commodity Research at Kotak Securities, remain bullish on the yellow metal. He said the general bias in gold remains on the upside until $1,700 per troy ounce holds. "Gold may witness mixed trade as global risk factors and hopes of stimulus measures may continue to support while steady equity markets may limit upside."
At 12:55 pm (GMT), spot gold was down by $10.01 at $1,737.91 an ounce in London trading.
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