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Gold prices down for 3rd day to Rs 47,008/10 gm on firm dollar; silver slumps Rs 398

The gold/silver ratio currently stands at 69.32 to 1, which means 69.32 ounces of silver is required to buy an ounce of gold.

Mumbai / June 29, 2021 / 08:03 PM IST

Gold prices fall for the third day by Rs 81 to Rs 47,008 per 10 gram at the Mumbai retail market on lacklustre global cues and a stronger dollar. The precious metal has been stuck in a range below $1,800/oz amid a lack of direction.

The rate of 10 gram 22-carat gold in Mumbai was Rs 43,059 plus 3 percent GST, while 24-carat 10 gram was Rs 47,008 plus GST. The 18-carat gold quoted at Rs 35,256 plus GST in the retail market.

The US dollar crossed 92 marks at Rs 92.09, up 0.24 percent against a basket of six rival currencies.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund rose by 2.9 tonnes to 1,045.78 tonnes. The ETF has a market value of $59.83 billion.

Spot gold dropped $4.92 to $1,773.47 an ounce at 12:14 GMT in London trading.

MCX Bulldesk modestly rose 18 points or 0.12 percent, at 14,532 at 15:54. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold prices edged lower after steady move witnessed in the last couple of sessions amidst an uptick in dollar. Comments from Fed underplaying inflation and favouring the tapering move. The Fed has made “substantial further progress” towards its inflation goal to begin tapering asset purchases, Fed President Barkin said.

ECB policymakers started a debate about ending emergency bond purchases launched at the start of the coronavirus pandemic last year, with fault lines already emerging between so-called hawks and doves. Updates regarding infrastructure bill will be in focus. Market participants will also focus on the US consumer confidence data scheduled later today”, said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.

The broader range on COMEX could be between $1758- 1785 and on the domestic front, prices could hover in the range of Rs 46,620- 47,120.

“COMEX gold extends losses as it trades lower near $1771/oz. Gold is pressurized by the stable US dollar, Fed’s monetary tightening concerns and the drop in Chinese imports last month. However, supporting price is renewed virus concerns and mixed economic data from major economies. ETF inflows also showed some buying interest. Gold may remain range bound below $1800/oz until there is more clarity about Fed's monetary policy stance,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 69.32 to 1, which means 69.32 ounces of silver is required to buy an ounce of gold.

Silver prices tumbled by Rs 398 to Rs 67,806 per kg against its closing price on June 28. 

In the futures market, the gold rate touched an intraday high of Rs 46,970 and an intraday low of Rs 46,648 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 44,501 and a high of Rs 49,721.

Gold futures for August delivery fell Rs 168, or 0.36 percent, to Rs 46,840 per 10 gram in evening trade on a business turnover of 11,192 lots. The same for October eased Rs 167, or 0.35 percent, to Rs 47,121 on a business turnover of 3,792 lots.

The value of August and October’s contracts traded so far is Rs 2,286.93 crore and Rs 49.47 crore, respectively.

Similarly, Gold Mini contract for August slipped Rs 195, or 0.41 percent at Rs 46,829 on a business turnover of 18,277 lots.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Gold prices witnessed lower trading on stronger dollar and concerns over FED tapering. Gold prices are stuck in range as market players are awaiting fresh cues from US employment data this week. Gold prices have kept downside limited on worries over rising cases of Delta variant of coronavirus across the globe.

We expect gold prices to trade sideways to down for the day with COMEX gold support at $1765 and resistance at $1790 per ounce. MCX Gold August support lies at Rs. 46600 and resistance at Rs.47100 per 10 gram.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited

Technically, International gold is trading with bearish momentum near support of $1,760-$1,770 levels and may breach them in the coming sessions. On the domestic front, MCX August Gold is trading in the support zone of Rs 46,800-Rs 46,600 levels. The market has been trading in a rectangle box for the last two weeks and we may expect prices to breach the lower levels and trade near Rs 46,000 levels.

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Sandeep Sinha