Gold prices rise for fifth straight day; up 21% for the year

Gold prices extended gains for the fifth successive day on June 12 gaining marginally to Rs 47,513 per 10 gram in the Mumbai bullion market. Rupee depreciation and stronger equity market helped. The yellow metal also gained on safe-haven demand as fear of a second wave of coronavirus hitting the US crept in.

The bullion metal has gained Rs 817, or 1.75 percent for the week, and up 21.08 percent for the year.

The rate of 10 gram 22-carat gold in Mumbai was Rs 43,522 plus 3 percent GST, while 24-carat 10 gram was Rs 47,513 plus GST. The 18-carat gold quoted at Rs 35,635 plus GST in the retail market.

Navneet Damani, Vice President, Motilal Oswal said gold prices held steady in the early morning session as downward pressure from a stronger dollar countered rising safe-haven demand supported by gloomy economic projections and renewed fears over a second wave in COVID-19 infections. A recent spike in cases in about a dozen US states partially reflected increased testing, but many of those states are also seeing rising hospitalisations.

Fed officials announced the need to keep the key interest rate near zero through at least 2022, and that it would be a "long road" to recovery. US jobless claims declined last week, but continuing claims are at an astoundingly high 20.9 million.

The broader trend on COMEX could be in the range of $1705-1740 and on domestic front prices could hover in the range of Rs 46,950-47,550.

The gold/silver ratio which refers to the amount of silver required to buy an ounce of gold stood at 99.49 to 1.

Silver prices declined Rs 730 to Rs 47,755 per kg from its closing on June 11. The white has lost Rs 45, or 0.10 percent for the week.

In the futures market, gold rate touched an intraday high of Rs 47,320 and an intraday low of Rs 46,065 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 39,200 and a high of Rs 48,190.

Gold futures for August delivery slipped Rs 134, or 0.28 percent, at Rs 47,280 per 10 gram in evening trade on a business turnover of 14,722 lots. The same for October delivery eased Rs 144, or 0.30 percent, at Rs 47,452 on a business turnover of 5,499 lots.

The value of the August and October contracts traded so far is Rs 2,365.82 crore and Rs 52.49 crore, respectively.

Similarly, Gold Mini contract for July was down Rs 160, or 0.34 percent at Rs 47,245 on a business turnover of 10,393 lots.

MCX Gold has intraday support at Rs 47,035-46,880 whereas resistance is at Rs 47,460-47,590, according to Motilal Oswal.

The broking firm said spot gold has support at $1,728-1,720 whereas resistance is at $1,744-1,750 levels.

At 12:08 pm (GMT), spot gold gained $5.80 at $1,733.36 an ounce in London trading.

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