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Gold prices flat at Rs 48,981/10 gm on subdued global cues; Silver corrects by Rs 512 a kg

Gold may remain choppy reflecting volatility in the equity market and the US dollar; however, the general bias may be on the upside unless the US dollar edges up sharply.

Mumbai / June 09, 2021 / 06:31 PM IST
Gold futures for August delivery gained Rs 25, or 0.05 percent, to Rs 49,152 per 10 gram in evening trade on a business turnover of 11,662 lots.

Gold futures for August delivery gained Rs 25, or 0.05 percent, to Rs 49,152 per 10 gram in evening trade on a business turnover of 11,662 lots.

Gold prices were steady at Rs 48,981 per 10 gram at Mumbai retail market on subdued global cues ahead of US inflation data and ECB policy meeting due tomorrow. The yellow metal traded in a narrow band on dollar fluctuation and supported by a dip in US Treasury yield.

The rate of 10 gram 22-carat gold in Mumbai was Rs 44,867 plus 3 percent GST, while 24-carat 10 gram was Rs 48,981 plus GST. The 18-carat gold quoted at Rs 36,736 plus GST in the retail market.

President Biden broke off talks on an infrastructure bill with a key Republican, instead of reaching out to a bipartisan group, after one-on-one talks with Senator Capito were described as hitting a “brick wall".

US Labour Department data showed job openings in April rose to a record 9.3 million as compared to 83 million in March.

Market participants now await the US inflation data due tomorrow for further clarity on the Federal Reserve’s timeline for changes in their current policy.

Close

The US dollar slightly declined to 89.99, down 0.09 percent against a basket of six rival currencies. 

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, was unchanged at 1,037.33 tonnes. The ETF has a market value of $63.13 billion.

Spot gold fell marginally by $1.32 to $1,891.53 an ounce at 12:21 GMT in London trading.

MCX Bulldesk increased 19 points or 0.13 percent, at 15,218 at 18:10. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold price continues to trade in a range; as investors are holding back from making large bets ahead of US inflation data and the ECB policy meeting later this week. The US 10Y Treasury yields fell to their lowest in more than a month, which is supporting the metal prices at lower levels. US small-business confidence was recorded lower last month, the first decline in four months, as a nationwide labour shortage and inflation worries weighed on business owners’ economic outlook”, said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.

The broader range on COMEX could be between $1,883- $1,908 and on the domestic front, prices could hover in the range of Rs 48,900- Rs 49,350.

“COMEX gold trades lower near $1890/oz. Gold is choppy as support from lower bond yields, choppy equities is countered by upbeat US jobs openings report, lack of ETF buying and slack consumer demand in India. Gold may remain choppy reflecting volatility in the equity market and US dollar however the general bias may be on the upside unless the US dollar edged up sharply”, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 69.16 to 1, which means 69.16 ounces of silver is required to buy an ounce of gold.

Silver prices tumbled by Rs 512 to Rs 70,819 per kg against its closing price on June 8.

In the futures market, the gold rate touched an intraday high of Rs 49,198 and an intraday low of Rs 49,024 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 gained Rs 25, or 0.05 percent, to Rs 49,152 per 10 gram in evening trade on a business turnover of 11,662 lots. The same for October rose Rs 28, or 0.06 percent, to Rs 49,443 on a business turnover of 2,418 lots.

The value of August and October’s contracts traded so far is Rs 1,423.73 crore and Rs 81.50 crore, respectively.

Similarly, Gold Mini contract for July edged up by Rs 33, or 0.07 percent at Rs 48,941 on a business turnover of 14,977 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices are trading in a narrow range with dollar fluctuations as traders and investors are waiting for fresh triggers from US inflation data. The lack of key economic data and comments from the US treasury secretary on inflation has kept bullion price in range in the week so far. 

We expect gold prices to trade sideways to higher for the day with COMEX gold support at $1,880 and resistance at $1,910 per ounce. MCX Gold August support lies at Rs 48,800 and resistance at Rs 49,500 per 10 gram.

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

Technically, International Gold is trading with marginal sideways to negative bias below $1,900 levels and may decline and test the intraday support of $1,885-$1,880 levels. On the MCX, Gold is trading with negative bias and resisting below Rs 49,200-Rs 49,300 levels and may continue the same and decline till Rs 48,900 in the evening session.
Sandeep Sinha

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