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Gold prices fall for the second straight day to Rs 48,750/10 gram, silver rises by Rs 405 a kg

International Gold is trading with negative bias below $1,900 levels and may continue to decline and test the major support of $1,870-1,860 levels.

Mumbai / June 10, 2021 / 06:23 PM IST
The gold/silver ratio currently stands at 68.44 to 1, which means 68.44 ounces of silver is required to buy an ounce of gold.

The gold/silver ratio currently stands at 68.44 to 1, which means 68.44 ounces of silver is required to buy an ounce of gold.

Gold prices declined for the second successive day to Rs 48,750 per 10 gram at Mumbai retail market on weak global cues and a stronger dollar. However, the precious metal downside was capped by depreciation in Rupee.

The rate of 10 gram 22-carat gold in Mumbai was Rs 44,655 plus 3 percent GST, while 24-carat 10 gram was Rs 48,750 plus GST. The 18-carat gold quoted at Rs 36,563 plus GST in the retail market.

Investors await US Core CPI data and unemployment claims scheduled to be released later in the day which could impact bullion prices. 

The European Central Bank kept the interest rate unchanged at its policy meeting and reaffirm the accommodative monetary policy stance.

The US dollar traded higher at 90.22, up 0.11 percent against a basket of six rival currencies. 

Close

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 5.83 tones to 1,043.15 tonnes. The ETF has a market value of $63.53 billion.

Spot gold dropped by $14.10 to $1,874.43 an ounce at 12:07 GMT in London trading.

MCX Bulldesk tanked 99 points or 0.65 percent, at 15,136 at 17:38. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold prices edged lower after trading steady in last few trading sessions, weighed down by a firmer dollar, as investors sat on the sidelines waiting for clearer signals on inflation levels and economic growth ahead of US data and the European Central Bank meeting later in the day. Also, updates between the US-China trade war are making it back in the highlights, hence any major development in the same will be in focus.”, said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.

“Meanwhile, the US 10-year yields slipped below 1.50% for the first time since May 7, hence giving support to the metal prices. Along with the important inflation data, market participants will also keep an eye on the weekly jobless claims data scheduled later in the day”, he said.

The broader range on COMEX could be between $1,875- $1,900 and on the domestic front, prices could hover in the range of Rs 48,750- Rs 49,350.

“COMEX gold trades lower near $1,874/oz amid firmness in the US dollar index ahead of US inflation data and ECB’s monetary policy meeting today. ETF activity remains mixed while consumer demand in India remains impacted by virus related restrictions. Gold may remain choppy ahead of key events however the general bias remains on the upside unless we see a sharp rise in US dollar”, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 68.44 to 1, which means 68.44 ounces of silver is required to buy an ounce of gold.

Silver prices surged by Rs 405 to Rs 71,224 per kg against its closing price on June 9.

In the futures market, the gold rate touched an intraday high of Rs 49,037 and an intraday low of Rs 48,731 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 slipped Rs 304, or 0.62 percent, to Rs 48,820 per 10 gram in evening trade on a business turnover of 11,479 lots. The same for October slumped Rs 281, or 0.57 percent, to Rs 49,130 on a business turnover of 2,539 lots.

The value of August and October’s contracts traded so far is Rs 1,695.71 crore and Rs 63.02 crore, respectively.

Similarly, Gold Mini contract for July declined by Rs 273, or 0.56 percent at Rs 48,631 on a business turnover of 16,081 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices traded lower with a firm dollar and despite fall in US treasury yields. The market is awaiting fresh cues from US inflation data due today. The 10 year US Treasury yields fell below 1.50% followed by a strong auction. The US CPI data will lead to more clarity on FED's policy actions.

We expect gold prices to trade sideways to lower for the day with COMEX gold support at $1,860 and resistance at $1,910 per ounce. MCX Gold August support lies at Rs 48,500 and resistance at Rs 49,200 per 10 gram.

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

International Gold is trading with negative bias below $1,900 levels and may continue to decline and test the major support of $1,870-$1,860 levels. On the MCX, August Gold has been trading with negative momentum and the market has declined more than 300 points since the previous close.

We may expect a rise in prices till Rs 49,000- Rs 49,100 after which bearish momentum may continue. This rise may act as a selling opportunity for the investors.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sandeep Sinha

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