Gold prices eased Rs 163 to Rs 47,377 per 10 gram in the Mumbai bullion market on the back of an appreciating rupee versus the dollar. The precious metal eased after US data showed stronger than expected retail sales for May and optimism over a potential coronavirus drug.
The rate of 10 gram 18-, 22- and 24-carat gold in Mumbai was Rs 35,533, Rs 43,397 and Rs 47,377 plus 3 percent GST.
Navneet Damani, Vice President, Motilal Oswal, said gold edged up in seesaw trade on June 16 as concerns over a fresh coronavirus outbreak in China countered pressure from a surge in Wall Street driven by a record rise in US retail sales and optimism over a COVID-19 drug.
Beijing on June 16 raised its COVID-19 emergency response level to II from III, according to state media.
Market participants are also keeping a close eye on escalating tensions globally, as Indian and Chinese troops clashed along their disputed border, while North Korea blew up an inter-Korean liaison office set up in a border town, increasing distress in the market.
"The broader trend on COMEX could be in the range of $1,710-1,745/oz. On the domestic front, prices could hover in the range of Rs 47,000-47,700," Damani said.
Ravindra Rao, VP- Head Commodity Research, Kotak Securities, said gold is trading near $1,724/oz as global risk appetite has remained firm, tracking government as well as the monetary stimulus from major economies, along with recent improvement in macro-economic data from the US, Eurozone and China, which in turn is signalling that the worst may be over."
However, dousing hopes of a V-shaped recovery, Federal Reserve Chairman Jerome Powell in his testimony to the Senate on June 16 said the US economy may be bottoming out, but still has a long way to go before it reverses the substantial damage caused by the pandemic.
Gold may continue to remain choppy as caution prevails amid growing worries over resurgence of the second wave of infections in countries like China and the US along with rise in geopolitical tensions, Rao stated.
The gold/silver ratio currently stands at 98.31 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices rose Rs 320 to Rs 48,190 per kg from its closing on June 16.
In the futures market, gold touched an intraday high of Rs 47,483 and an intraday low of Rs 46,967 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 39,200 and a high of Rs 48,190.
Gold futures for August delivery slipped Rs 478, or 1 percent, at Rs 47,089 per 10 gram in evening trade on a business turnover of 13,808 lots. The same for October delivery eased Rs 527, or 1.10 percent, at Rs 47,250 on a business turnover of 5,607 lots.
The value of the August and October contracts traded so far is Rs 3,337.71 crore and Rs 39.33 crore, respectively.
Similarly, Gold Mini contract for July declined Rs 423, or 0.89 percent at Rs 47,111 on a business turnover of 11,196 lots.
At 12:33 pm (GMT), spot gold was down $6.87 at $1,719.64 an ounce in London trading.For All Commodities Related News - Click Here