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Gold prices fell 0.46% this week to Rs 50,064/10 gm, bias remains bullish for short term

Patel expects gold prices to trade in a current range with a bullish bias for the short term with COMEX spot gold having strong resistance near $1,910 per ounce and support at $1,850 per ounce.

Mumbai / December 26, 2020 / 04:01 PM IST
gold

gold

Gold prices declined to settle at Rs 50,064 per 10 gram on December 24 as participants trimmed their position as seen by the open interest. The precious metal ended the week with a loss of Rs 231 or 0.46 percent.

The yellow metal traded in the positive territory for two out of four sessions in a holiday-shortened week as markets were shut on Friday for Christmas and thin volume, but manage to close above the key psychological barrier of Rs 50,000/10 grams for second successive weeks tracking the general weakness in dollar and EU and the UK clinched a narrow Brexit deal.

In the retail market, the bullion metal closed at Rs 49,995 per gram on Thursday up 0.29 percent on a weaker dollar and subdued global cues. The discount offered by a dealer over official domestic price rose to $2 per troy ounce from $1 last week as high prices keep retail buyers away and inauspicious period of Khar Mass in North India during which no wedding takes place.

The rate of 10 gram 22-carat gold in Mumbai was Rs 45,795 plus 3 percent GST, while 24-carat 10 gram was Rs 49,995 plus GST. The 18-carat gold quoted at Rs 37,496 plus GST in the retail market.

The US dollar settled modestly lower at 90.25 or down 0.10 percent on Thursday against a basket of six currencies, though up 0.33 percent for the week.

Close

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund were unchanged at 1,167.52 tonnes.

MCX Bulldesk dropped 39 points, or 0.25 percent to end at 15,603. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold prices witnessed marginal correction witnessing roller coaster move on mixed global cues. The delay in US stimulus lifted dollar index higher along with weakness in Euro and pound over travel restrictions dues to a new strain of coronavirus. Gold prices managed to catch up the rally in the second half of the week over pandemic worries and slower economic growth. The rising COIVD-19 cases across world and lockdown measures in UK, Europe and some parts of US may keep risk premium high in gold prices”, said Tapan Patel- Senior Analyst (Commodities), HDFC securities.

The gold/silver ratio currently stands at 72.79 to 1, which means the amount of silver required to buy one ounce of gold. The decline in the ratio indicates that silver has outperformed gold.

Silver prices surged Rs 696 to Rs 66,431 per kg from its closing on December 23.

In the futures market, the gold rate touched an intraday high of Rs 50,186 and an intraday low of Rs 49,878 on the Multi-Commodity Exchange (MCX). For the February series, the yellow metal touched a low of Rs 41,560 and a high of Rs 57,100.

Gold futures for February delivery slides Rs 85, or 0.17 percent, to settle at Rs 50,064 per 10 gram with a business turnover of 10,016 lots. The same for April rose Rs 50, or 0.10 percent, at Rs 50,198 on a business turnover of 2,666 lots.

The value of the February and April’s contracts traded on December 24 was Rs 3,984.15 crore and Rs 202.36 crore, respectively.

Similarly, Gold Mini contract for January fell Rs 66, or 0.13 percent to close at Rs 49,843 on a business turnover of 9,639 lots.

“We expect gold prices to trade in a current range with a bullish bias for the short term with COMEX spot gold having strong resistance near $1,910 per ounce and support at $1,850 per ounce. At MCX, Gold February prices have near term resistance at Rs 50,700 per 10 grams and support at Rs 49,500 per 10 gram”, Patel said.

N S Ramaswamy, Head of Commodities, Ventura Securities said, "Technically, MCX Gold price February is trading in channel line (47,500 to 52,500) levels for the short term period. On the Downside, it has taken strong support at 200-day moving average on November 30, after that price bounce back from that level. Currently, 200-day moving average comes around Rs 48,850 levels, which will be going to provide immediate support after that Down channel line will provide strong support levels for the term period (one month period)." Similarly, on the upside, it will face strong resistance at the upper channel line which comes around Rs 52,350 to 52,500 levels approximately, he added.

Spot gold settled flat at $1,875.82 an ounce on Thursday in London trading.

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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
first published: Dec 26, 2020 04:01 pm

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