Gold prices dipped by Rs 135 to Rs 47,399 per 10 gram in the Mumbai retail market on weak global cues and the firm dollar, however, the downside was capped by the sharp depreciation in the rupee. The yellow metal traded lower on weaker investor interest and strength in equity markets.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,417 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,399 plus GST. The 18-carat gold is quoted at Rs 35,549 plus GST in the retail market.
The bullion metal prices were supported by signs of a slowdown in China’s economy, mounting geopolitical tension and the recent outbreaks of the new variant of Covid19 virus continued to hamper market sentiments.
India’s gold imports in August nearly doubled from a year ago on strong demand and as weaker prices prompted jewellers to ramp up purchases for the festive season. The country imported 121 tonnes of gold last month, compared to 63 tonnes in the same period last year.
Investors focus for the week, will be on the comments from Fed officials and ECB policy meet.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund were unchanged for the second day at 998.52 tonnes. The ETF has a market value of $58.52 billion.
The US dollar index traded jumped to 92.31, up 0.31 percent against a basket of six rival currencies. The jump in the dollar index makes gold expensive for holders of other currencies.
Spot gold tumbled by $12.28 to $1,810.99 an ounce at 1202 GMT in London trading.
MCX Bulldesk decreased by 71 points or 0.50 percent at 14,254 at 17:33. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold price inched lower, amidst an uptick in dollar and equities. Although, fear of rising COVID cases and expectation of a delay in tapering plan support the metal,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be between $1805- 1845 and on the domestic front, prices could hover in the range of Rs 47,190- 47,775.
The gold-silver ratio currently stands at 73.90 to 1, which means 73.90 ounces of silver is required to buy an ounce of gold.
Silver prices corrected by Rs 822 to Rs 64,135 per kg against its closing price on September 6.
In the futures market, the gold rate touched an intraday high of Rs 47,435 and an intraday low of Rs 47,221 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 slipped Rs 110, or 0.23 percent, to Rs 47,315 per 10 gram in evening trade on a business turnover of 10,291 lots. The same for December dropped by Rs 73, or 0.15 percent, to Rs 47,495 on a business turnover of 4,550 lots.
The value of October and December’s contracts traded so far is Rs 1,323.01 crore and Rs 75.98 crore, respectively.
Similarly, the Gold Mini contract for October slides Rs 105, or 0.22 percent at Rs 47,345 on a business turnover of 14,394 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices traded weak on Tuesday following the dollar recovery. The mixed global cues over Fed tapering doubts has pressured gold prices with a stronger dollar. The dollar index was trading around 0.27% up in the morning trade.
We expect gold prices to trade sideways to down with COMEX spot gold resistance at $1833 and support at $1805 per ounce. MCX Gold October support lies at Rs. 47000 and resistance at Rs.47600 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading with negative bias and has declined more than 15 points since the previous close. MCX Gold October is trading with bearish bias and the market has declined more than 150 points since the previous close and could continue the same momentum in the evening session as well where Rs 47,200-47,100 levels may get tested.
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