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Gold prices hover near Rs 47,000 per 10 gm on muted global trend; silver declines by Rs 70 a kg

Gold may remain choppy ahead of inflation data. However, reading in line with or lower than expectations may ease worries about Fed's tightening and lend support to gold prices, say analysts.

September 14, 2021 / 06:16 PM IST

Gold prices fell for the fourth straight day by Rs 42 to Rs 47,017 per 10 gram in the Mumbai retail market on muted global trends. Investors were cautious ahead of US August Inflation data to be released later in the day which could offer hints on the Federal Reserve’s decision to taper stimulus.

The price of 10 gram, 22-carat gold in Mumbai was Rs 43,068 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,017 plus GST. The 18-carat gold is quoted at Rs 35,263 plus GST in the retail market.

The yellow metal traded in a narrow range as investors moved on the sidelines ahead of US inflation data. Forecasts indicate a slight easing in price pressure last month; however, it still remains at an elevated level.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 2 tonnes to 1,000.21 tonnes. The ETF has a market value of $57.67 billion.

The dollar index, which measures the greenback's strength against a basket of six currencies, was trading 0.04 percent down at 92.61.

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Spot gold moderately jumped by $1.96 to $1,789.56 an ounce at 1328 GMT in London trading.

MCX Bulldesk fell by 61 points or 0.43 percent at 14,029 at 17:33. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“COMEX gold trades lower near $1788/oz. Gold has been bound in a range after recent losses as the US dollar came to a halt after testing a 2-week high. Correction in bond yields and some ETF inflows also lent support. Also supporting gold price is rising inflation concerns, persisting virus risks, China’s regulatory crackdown measures and increasing geopolitical tensions. Gold may remain choppy ahead of inflation data; however, reading in line with or lower than expectations may ease worries about Fed's tightening and lend support to gold prices,” said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The gold-silver ratio currently stands at 74.86 to 1, which means 74.86 ounces of silver is required to buy an ounce of gold.

Silver prices modestly slide by Rs 70 to Rs 62,806 per kg against its closing price on September 13.

In the futures market, the gold rate touched an intraday high of Rs 46,925 and an intraday low of Rs 46,715 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,662 and a high of Rs 50,040. 

Gold futures for October delivery dropped Rs 143, or 0.30 percent, to Rs 46,765 per 10 gram in evening trade on a business turnover of 9,033 lots. The same for December edged lower by Rs 174, or 0.37 percent, to Rs 46,919 on a business turnover of 6,399 lots.

The value of October and December’s contracts traded so far is Rs 1,681.25 crore and Rs 375.50 crore, respectively.

Similarly, the Gold Mini contract for October eased Rs 146, or 0.31 percent at Rs 46,800 on a business turnover of 16,964 lots.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Gold prices are capped below $1800 on mixed fundamentals and US FED tapering expectations. Global players are awaiting US inflation data on Tuesday which may raise speculation of the timing of FED’s asset purchase unwinding. 

We expect gold prices to trade sideways to down with COMEX spot gold resistance at $1,803 and support at $1775 per ounce. MCX Gold October support lies at Rs 46,600 and resistance at Rs 47,100 per 10 gram.

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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

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