Gold prices slipped by 104 to Rs 46,170 per 10 gram in the Mumbai retail market on subdued global cues, stronger dollar but the downside was capped by rupee depreciation. The yellow metal was supported by increased demand in China, safe-haven appeal as investors track the ongoing situation of cash-strapped property developer Evergrande.
The price of 10 gram, 22-carat gold in Mumbai was Rs 42,292 plus 3 percent GST, while 24-carat 10 gram stood at Rs 46,170 plus GST. The 18-carat gold is quoted at Rs 34,628 plus GST in the retail market.
Physical gold demand in top consumer China rose last week as buyers sought cover from the potential fallout of the Evergrande crisis coupled with factors including a seasonal pick-up in activity.
Investors will track the U.S. Core durables goods orders data later in the day.
The retail gold demand has been tepid due to the ongoing Shradh (Pitru Paksha) period as buyer postponed their jewellery purchase.
The CFTC data showed that money managers decreased their net long positions by 25,801 lots in last week.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund rose 0.87 tonnes to 993.52 tonnes. The ETF has a market value of $55.78 billion.
The US dollar index traded higher at 93.42, up 0.10 percent against a basket of six rival currencies. The rise in the greenback makes gold expensive for holders of other currencies.
Spot gold slightly up by $0.63 to $1,750.99 an ounce at 1221 GMT in London trading.
MCX Bulldesk increased by 58 points or 0.42 percent at 13,760 at 18:00. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold price edged higher after hovering below the $1750 level in the previous week, as investors avoided riskier assets because of China’s Evergrande concerns, but looming interest rate hikes and rise in yields marking the highest level since July, slowed bullion’s advance. Few policymakers last week, mentioned that they felt the U.S. economy is already in good enough shape for the central bank to begin to withdraw support for the economy. In this important week, governors of major central banks are scheduled to speak. Speech from Governor Powell regarding the central bank’s policy response to the pandemic will an important event to watch for,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be between $1,740-1,780 and on the domestic front, prices could hover in the range of Rs 45,800-46,400.
The gold-silver ratio currently stands at 76.51 to 1, which means 76.51 ounces of silver is required to buy an ounce of gold.
Silver prices eased by Rs 69 to Rs 60,341 per kg against its closing price on September 24.
In the futures market, the gold rate touched an intraday high of Rs 46,186 and an intraday low of Rs 45,902 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,662 and a high of Rs 50,040.
Gold futures for October delivery gained Rs 33, or 0.07 percent, to Rs 46,028 per 10 gram in evening trade on a business turnover of 4,453 lots. The same for December soared by Rs 61, or 0.13 percent, to Rs 46,140 on a business turnover of 11,230 lots.
The value of October and December’s contracts traded so far is Rs 1,763.37 crore and Rs 929.05 crore, respectively.
Similarly, the Gold Mini contract for October jumped Rs 74, or 0.16 percent at Rs 46,069 on a business turnover of 14,665 lots.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices pared some of the previous losses on FED tapering jitters and a rise in US bond yields. The US 10 year treasury yields rose to 1.45% during the week lowering demand for safe haven assets. Gold prices traded higher on Monday on worries over China’s Evergrande debt crisis which has led to higher demand for gold from China.
We expect gold prices to trade sideways to up with COMEX spot gold resistance at $1770 and support at $1740 per ounce. MCX Gold October support lies at Rs. 45800 and resistance at Rs.46300 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading in a choppy manner near $1,750 levels. Prices tested $1,760 levels and could not sustain above it. MCX Gold October is trading with marginal negative bias. We may expect prices to decline in the coming sessions and trade near Rs 45,800 levels.
Geojit Financial Services
By breaking the downside hurdle of Rs 45,800 may squeeze down prices lower. Inability to challenge below the same may push the price higher in the upcoming session.
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