Gold prices gain for 2nd straight day to touch Rs 47,587/10 gm, rises 0.80% in the week; silver slips

Gold prices rose for the second consecutive day by Rs 324 to Rs 47,587 per 10 gram at the Mumbai retail market on declining Treasury yield, safe-haven due to worries over rising Delta variant and continuous fall in rupee. The precious metal gained Rs 382 or 0.80 percent during the week in the domestic market.

The rate of 10 gram 22-carat gold in Mumbai was Rs 43,590 plus 3 percent GST, while 24-carat 10 gram was Rs 47,587 plus GST. The 18-carat gold quoted at Rs 35,690 plus GST in the retail market.

Market players will take further cues from US non-farm payrolls data to be released later in the day.

The Indian rupee dropped for the seventh day to close at 74.68. It fell 0.64 percent during the week.

The US dollar traded climbed to Rs 92.65, up 0.06 percent against a basket of six rival currencies, the highest since April. The stronger greenback makes bullion metal less attractive for other currency holders.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell by 2.6 tonnes to 1,043.15 tonnes. The ETF has a market value of $59.72 billion.

Spot gold rose by $6.92 to $1,783.93 an ounce at 1217 GMT in London trading.

MCX Bulldesk advanced 81 points or 0.56 percent, at 14,631 at 17:48. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold prices inched higher as concerns over the spread of the coronavirus new variants boosted bullion's appeal, while investors awaited U.S. non-farm payrolls data that could sway Federal Reserve’s monetary policy stance. The dollar held near three-month highs; whereas the US Treasury was seen hovering around the 1.46 mark. The $715 billion surface and water infrastructure bill was approved by the House of Representatives, hence being the first step towards approving the bill, which Congress targets completing by September 2021,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.

On the data front, US manufacturing PMI data was recorded below expectations although it remained above 60, on other hand, weekly jobless claims fell more than expected last week. After positive private payroll numbers, market participants today will focus on the U.S. non-farm payroll data; which if recorded better than expectations it could put pressure on gold prices.

The broader range on COMEX could be between $1,768-1,795 and on the domestic front, prices could hover in the range of Rs 46,930-47,420.

“COMEX gold trades higher near $1784/oz amid stable US Dollar ahead of the all-important US Non-farm payroll data. Gold has recovered from recent lows amid dip-buying, renewed virus concerns and mixed economic data from major economies. However, weighing on price is firmness in the US dollar amid Fed’s monetary tightening expectations, strength in equity markets and lack of investor buying. Gold has edged up amid some buying interest at the start of a new quarter and renewed virus concerns however general bias remains weak owing to Fed's tightening outlook. US Jobs report will be the focus for the day that might further provide direction to US Dollar and in turn Gold,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 68.99 to 1, which means 68.99 ounces of silver is required to buy an ounce of gold.

Silver prices dropped by Rs 185 to Rs 69,975 per kg against its closing price on July 1. 

In the futures market, the gold rate touched an intraday high of Rs 47,475 and an intraday low of Rs 47,139 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 increased Rs 314, or 0.67 percent, to Rs 47,353 per 10 gram in evening trade on a business turnover of 10,697 lots. The same for October jumped Rs 304, or 0.64 percent, to Rs 47,625 on a business turnover of 4,154 lots.

The value of August and October’s contracts traded so far is Rs 1,790.03 crore and Rs 89.94 crore, respectively.

Similarly, Gold Mini contract for August rose by Rs 278, or 0.59 percent at Rs 47,327 on a business turnover of 15,619 lots.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Gold prices traded firm after weaker than expected US manufacturing PMI and another stimulus approval. The US House approved a $715 billion surface transportation and water infrastructure bill on Thursday. The market players are awaiting key US employment data in the evening session today.

We expect gold prices to trade sideways to up for the day with COMEX gold support at $1760 and resistance at $1800 per ounce. MCX Gold August support lies at Rs. 46900 and resistance at Rs.47600 per 10 gram.

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

Technically, International gold is trading with positive bias near major resistance of $1,785-$1,800 levels and may decline from here in the coming sessions. On the domestic front, MCX August Gold is trading above 20-SMA and markets have rallied more than 300 points since the previous session. We may expect the market to a marginal decline in prices in the upcoming session. 

For all commodities-related news, click here

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.