Gold prices advanced by Rs 276 to Rs 46,545 per 10 gram in the Mumbai retail market on firm global cues. The yellow metal rose on surging coronavirus cases globally and decline in bond yields increasing safe-haven appeal.
The rate of 10 gram 22-carat gold in Mumbai was Rs 42,852 plus 3 percent GST, while 24-carat 10 gram was Rs 46,782 plus GST. The 18-carat gold quoted at Rs 35,087 plus GST in the retail market.
Bullion has been stuck in the $1,670-1,750/oz range amid mixed trade in the US dollar index.
US government’s budget deficit surged to an all-time high of $1.7 trillion for the first six months of the budget year, nearly double from the previous record.
The US dollar trades marginally lower at 91.65, or down 0.02 percent against a basket of six rival currencies.
The US 10 year treasury yields trade weaker at 1.61 percent, down 2 basis points in the evening session.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund decreased by 3.2 tonnes to 1,022.86, the lowest since April 2020.
Spot gold rose by $10.24 to $1,746.62 an ounce at 1202 GMT in London trading.
MCX Bulldesk increased 55 points or 0.38 percent, at 14,660 at 17:33. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices rose as a weaker dollar and U.S. yields boosted the safe-haven metal's appeal, while investors awaited the release of weekly jobless claims and March retail sales data in the U.S. later in the day. The dollar held near a three-week low against a basket of currencies on Thursday, as U.S. bond yields levelled off following a surge last month”, said Navneet Damani, Vice President, Motilal Oswal.
Governor Powell mentioned in his speech yesterday that the U.S. economy accelerated into the spring based on rising consumer sentiment and the country is on track for faster growth and hiring in the coming months. US health panel called for more data before making a decision on whether to resume Johnson & Johnson's. Both U.S. retail sales and weekly jobless claims will be important to watch for as it could trigger further volatility in the market.
The broader range on COMEX could be between $1720- 1750 and on the domestic front, prices could hover in the range of Rs 46,580- 47,070.
“COMEX gold trades higher near $1748/oz. Gold has been trading in a broad range between $1,730 to $1760. Weighing on the gold price is increasing optimism about the US economy and continuing ETF outflows. However, supporting price is Fed’s emphasis on keeping interest rates low and worsening virus situation.
"Gold is struggling to sustain above $1755-1760/oz amid mixed factors however rising virus cases and loose monetary policy stance may continue to support prices”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 68.77 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices climbed by Rs 1,178 to Rs 68,021 per kg from its closing on April 14.
In the futures market, the gold rate touched an intraday high of Rs 46,896 and an intraday low of Rs 46,680 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 44,108 and a high of Rs 51,924.
Gold futures for June delivery gained Rs 263, or 0.56 percent, at Rs 46,871 per 10 gram in evening trade on a business turnover of 11,668 lots. The same for August jumped Rs 247, or 0.53 percent, at Rs 47,078 on a business turnover of 2,021 lots.
The value of June and August’s contracts traded so far is Rs 1,801.55 crore and Rs 51.74 crore, respectively.
Similarly, Gold Mini contract for May edged higher Rs 263, or 0.57 percent at Rs 46,580 on a business turnover of 17,356 lots.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices traded higher on dollar decline which fell to three-week lows despite some uptick in bond yields. The higher inflation concerns and worries over rising virus cases have supported buying in the yellow metal.
We expect gold prices to trade sideways to up for the day with COMEX spot gold support lies at $1,730 and resistance at $1,760. MCX Gold June support lies at Rs 46,500 and resistance lies at Rs 47,100.
Axis Securities advised its clients to buy June Gold at Rs 46,700 with stop loss at Rs 46,500 and a target of Rs 47,000.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
International gold is trading in bullish momentum. Prices are resisting below $1,750-1,760 levels.- On the domestic front, MCX Gold June has been trading with a marginal sideways and positive bias. We may expect prices to continue to trade in a choppy manner and resist below Rs 47,000 levels during the evening session.
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