Gold prices gained for the second consecutive day, up by Rs 246 to Rs 47,949 per 10 gram in the Mumbai retail market on positive global cues and a weaker dollar. The yellow metal was supported by safe-haven buying owing to surging cases of Delta variant of coronavirus globally and lower Treasury yields.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,921 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,949 plus GST. The 18-carat gold is quoted at Rs 35,962 plus GST in the retail market.
The traders and investors will focus on the FOMC meeting on July 27-28 to seek clarity over FED tapering. The market will closely watch comments from Fed chief Jerome Powell which could continue to suggest that the central bank would remain accommodative despite recent spikes in inflation.
The CFTC data showed that money managers increased their net long positions by 5826 lots to 108,815 contracts last week.
The US dollar trades lower at 92.72, down 0.22 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell by 1.17 tonne to 1,027.38 tonnes. The ETF has a market value of $59.42 billion.
Spot gold advanced by $5.00 to $1,808.17 an ounce at 1200 GMT in London trading.
MCX Bulldesk climbed by 62 points or 0.43 percent, at 14,585 at 17:31. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices edged higher, amidst the fall in US yields and concerns over rising Delta variant cases, with investors turning their attention to the Federal Open Market Committee’s meeting this week. Concerns regarding the rise in cases of Delta variant is adding to the panic in the market. There have been certain reports regarding the efficiency of the vaccine against the new Covid variants although, the market is awaiting official comment from the pharma companies,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be $1,792-1,825 and on the domestic front, prices could hover in the range of Rs 47,390- 47,920.
“COMEX gold trades marginally higher near $1808/oz. Gold inched up amid choppiness in the US dollar, increasing virus concerns, US-China tensions and China’s crackdown on technology firms. However, weighing on price is continuing ETF outflows, weaker consumer demand and uncertainty ahead of the Fed meeting this week. Gold may remain supported near $1800/oz until dollar is steady,” said Ravindra Rao, CMT, EPAT-Quantinsti, Head - Commodity Research at Kotak Securities Ltd.
The gold/silver ratio currently stands at 70.97 to 1, which means 70.97 ounces of silver is required to buy an ounce of gold.
Silver prices rose by Rs 516 to Rs 67,555 per kg against its closing price on July 23.
In the futures market, the gold rate touched an intraday high of Rs 47,784 and an intraday low of Rs 47,580 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 118, or 0.25 percent, to Rs 47,652 per 10 gram in evening trade on a business turnover of 5,005 lots. The same for October soared Rs 111, or 0.23 percent, to Rs 47,895 on a business turnover of 9,740 lots.
The value of August and October’s contracts traded so far is Rs 1,620.64 crore and Rs 489.28 crore, respectively.
Similarly, Gold Mini contract for August jumped Rs 136, or 0.29 percent at Rs 47,657 on a business turnover of 10,793 lots.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices got support from the soft dollar index and a fall in US treasury yields. The weak equity indices also boosted buying in gold prices with China crackdown on tech companies. The 10-year US Treasury yields fell to 1.23 percent paving way for gold as safe-haven buying.
We expect gold prices to trade up with COMEX spot gold resistance at $1,820 and support at $1,790 per ounce. MCX Gold August support lies at Rs 47,400 and resistance at Rs 47,900 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading with a positive bias near $1,800 levels and are sustaining above support of $1,798-$1,790 levels. On the domestic front, MCX August gold is trading with marginal sideways and positive bias. We may witness bearish momentum during the evening session and the price may trade near Rs 47,500.
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