Gold prices declined by Rs 225 to touch Rs 44,655 per 10 gram in the Mumbai retail market thanks to the strong rupee and muted global trend. The yellow metal was pressured by rising US Treasury yields and dollar and failed to break past the critical $1,750 resistance zone.
The bullion metal has been stuck in a narrow range in the last few sessions amid a lack of direction. It declined by Rs 282, or 0.63 percent during the week in the domestic market.
The rate of 10 gram 22-carat gold in Mumbai was Rs 40,904 plus 3 percent GST, while 24-carat 10 gram was Rs 44,665 plus GST. The 18-carat gold quoted at Rs 33,491 plus GST in the retail market.
The US dollar trades modestly firm at 92.87, or up 0.05 percent against a basket of six rival currencies on safe-haven appeal. The dollar index hit a 2021 high of 92.89 during the intraday, the highest level since November 10.
The US 10-year treasury yields inched higher at 1.67 percent, up 6 basis point. The higher yields make non-interest yielding precious metal unattractive investment.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund were unchanged at 1043.03 tonnes.
Spot gold fell slightly by $1.08 to $1,726.26 an ounce at 1215 GMT in London trading.
MCX Bulldesk eased 29 points or 0.21 percent, at 14,083 at 17:47. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President, Motilal Oswal said, “Gold prices inched lower and on a course for a first weekly decline in three weeks as continuous updates from Fed officials regarding the growth of the US economy, elevated Treasury yields and US dollar, denting the safe-haven bullion's appeal.”
“On other hand, rising COVID cases and restrictions to curb the spread of the disease has capped losses. The tussle between the US and other countries is also lending support to the bullion. After a positive new jobless claims data which affected the overall metals sentiment, market participants today will focus on the US Core PCE price index scheduled later in the day.”
The broader range on COMEX could be between $1710 and $1737 and on the domestic front, prices could hover in the range of Rs 44,450-44,900.
The gold/silver ratio currently stands at 69.06 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices surged by Rs 377 to Rs 64,658 per kg from its closing on March 25. The white metal tumbled Rs 2,157 or 3.22 percent this week in the retail market.
In the futures market, the gold rate touched an intraday high of Rs 44,645 and an intraday low of Rs 44,441 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 44,150 and a high of Rs 51,931.
Gold futures for April delivery slipped by Rs 115, or 0.26 percent, at Rs 44,580 per 10 gram in evening trade on a business turnover of 4,790 lots. The same for June slumped Rs 125, or 0.28 percent, at Rs 44,986 on a business turnover of 10,959 lots.
The value of the April and June’s contracts traded so far is Rs 2,010.30 crore and Rs 1,268.83 crore, respectively.
Similarly, Gold Mini contract for April decreased by Rs 173, or 0.39 percent at Rs 44,553 on a business turnover of 13,203 lots.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
We expect gold prices to trade sideways to down for the day with COMEX spot gold support lies at $1,710 and resistance at $1,740. MCX Gold April support lies at Rs 44,200 and resistance lies at Rs 44,800.
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