Gold prices dropped for the second straight by Rs 196 to Rs 47,203 per 10 gram in the Mumbai retail market on firm dollar and rising US Treasury yields. The yellow metal traded in a narrow range ahead of the ECB policy meet outcome tomorrow.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,238 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,203 plus GST. The 18-carat gold is quoted at Rs 35,402 plus GST in the retail market.
The bullion prices have been supported by increasing geopolitical tension, a slowdown in China’s economy and rising cases of Delta variant of coronavirus.
On the data front, Japan’s and the EU saw a better than expected growth numbers economy, although a resurgence in COVID-19 is undermining service-sector consumption and clouding the outlook. Comments from Fed officials and ECB policy meet will be in focus this week.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund were unchanged for the third day at 998.52 tonnes. The ETF has a market value of $57.83 billion.
The US dollar index traded soared to 92.64, up 0.14 percent against a basket of six rival currencies.
Spot gold jumped by $7.72 to $1,802.03 an ounce at 1213 GMT in London trading.
MCX Bulldesk advanced by 57 points or 0.40 percent at 14,230 at 17:47. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold continues to hover around the $1800 level after inching lower in the previous session, amidst a sudden uptick in U.S. Yields and Dollar. The dollar hovered near a one-week peak against major peers. The US 10Y yield rose to around 1.38% for the first time since mid-July. In the recent, Jackson hole symposium when Powell showed concerns regarding the rising inflation and separated the tapering and rate hike timeline giving a boost to the metals. Although, concerns regarding the tapering process which could start before the year-end, put some pressure some cap on gains of the metals. U.S. President Joe Biden, tomorrow, will present a six-pronged strategy intended to fight the spread of the Delta coronavirus variant and increase vaccinations,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The Broader range on COMEX could be between $1780- 1830 and on the domestic front, prices could hover in the range of Rs 46,890- 47,400.
The gold-silver ratio currently stands at 73.24 to 1, which means 73.24 ounces of silver is required to buy an ounce of gold.
Silver prices rose by Rs 314 to Rs 64,449 per kg against its closing price on September 7.
In the futures market, the gold rate touched an intraday high of Rs 47,140 and an intraday low of Rs 46,960 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 151, or 0.32 percent, to Rs 47,090 per 10 gram in evening trade on a business turnover of 10,151 lots. The same for December inched up by Rs 180, or 0.38 percent, to Rs 47,300 on a business turnover of 4,735 lots.
The value of October and December’s contracts traded so far is Rs 1,315.39 crore and Rs 204.60 crore, respectively.
Similarly, the Gold Mini contract for October climbed Rs 109, or 0.23 percent at Rs 47,098 on a business turnover of 15,813 lots.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices witnessed some recovery paring some previous losses on Wednesday. Gold prices are still trading below $1800 with a stronger dollar. The dollar index rose to one week high near 92.67 while 10 year US Treasury yields fell to 1.348% from 1.385% for the day providing support to gold prices. Market players will eye for FED's Beige Book tonight to get a clue on the growth of US economy.
We expect gold prices to trade sideways to down with COMEX spot gold resistance at $1815 and support at $1790 per ounce. MCX Gold October support lies at Rs. 46800 and resistance at Rs.47200 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading with marginal gains below $1,800 levels. MCX Gold October is trading with positive bias since morning and we may expect the same momentum to continue during the evening hours as well. Major support is at Rs 47,000-46,800 levels, which may be tested in the coming sessions.
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