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Gold prices jump to Rs 47,478/10 gm, silver climbs Rs 866 a kg

"Gold prices may trade higher on the dovish Fed stance with pandemic worries and slower economic growth with inflation concerns," said Tapan Patel- Senior Analyst (Commodities) at HDFC Securities.

Mumbai / August 30, 2021 / 07:03 PM IST
Gold jewellery | Representative image

Gold jewellery | Representative image

Gold prices on August 30 jumped by Rs 329 to Rs 47,478 per 10 gram in the Mumbai retail market tracking a sharp spike on Friday evening in the global market after the Fed chief did not give any timeline for increasing rate but the upside was capped by rupee appreciation. The yellow metal gave up early gains amid choppiness in the dollar, uncertainties related to coronavirus cases, and ongoing political upheaval in Afghanistan.

The price of 10 gram, 22-carat gold in Mumbai was Rs 43,490 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,476 plus GST. The 18-carat gold is quoted at Rs 35,609 plus GST in the retail market.

Tapan Patel- Senior Analyst (Commodities), HDFC Securities said, “Gold prices traded higher during last week with gold prices reported the best week since May hitting three-week highs. Gold prices rallied on Friday making most of the gains of the week with comments from US Jackson Hole Symposium. Gold prices got support from the weaker dollar and fall in US treasury yields after US Fed Chairman sounded more cautious and failed to give clear hint on asset tapering. Jerome Powell said that the US economy was on good footing but still vulnerable from risks posed by the coronavirus pandemic.”

The CFTC data showed that money managers increased their net long positions by 16,943 lots in last week.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged for the second day at 1,001.72 tonnes, the lowest since April 2020. The ETF has a market value of $57.90 billion.

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The US dollar index traded slightly up to 92.71, up 0.03 percent against a basket of six rival currencies.

Spot gold moderately fell by $1.81 to $1,815.31 an ounce at 1254 GMT in London trading.

MCX Bulldesk fell by 56 points or 0.39 percent at 14,217 at 18:38. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“MCX gold October future may appreciate as the dollar has weakened after Fed Chair Powell offered no signal on when the central bank plans to cut its asset purchases beyond saying it could be "this year" and indicated it will remain cautious in any eventual decision to raise interest rates. On Friday MCX Gold October appreciated by nearly 300 points hence we don’t rule out the possibility of a subdued start of the week but eventually, we expect MCX Gold October to appreciate to Rs. 47,700 per 10 gram”, said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.

The gold-silver ratio currently stands at 74.41 to 1, which means 74.41 ounces of silver is required to buy an ounce of gold.

Silver prices advanced by Rs 866 to Rs 63,804 per kg against its closing price on August 27.

In the futures market, the gold rate touched an intraday high of Rs 47,494 and an intraday low of Rs 47,262 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 slipped by Rs 244, or 0.51 percent, to Rs 47,294 per 10 gram in evening trade on a business turnover of 11,390 lots. The same for December edged lower by Rs 239, or 0.50 percent, to Rs 47,472 on a business turnover of 3,198 lots.

The value of October and December’s contracts traded so far is Rs 1,397.76 crore and Rs 47.49 crore, respectively.

Similarly, Gold Mini contract for September slumped Rs 241, or 0.51 percent at Rs 47,175 on a business turnover of 3,032 lots.

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Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Gold prices pared some of the previous gains after rallying to three weeks high on dovish stance from Fed. Gold prices got support from the weaker dollar and a fall in US treasury yields after US Fed Chairman sounded more cautious and failed to give clear hint on asset tapering. Gold prices may trade higher on the dovish Fed stance with pandemic worries and slower economic growth with inflation concerns. 

We expect gold prices to trade sideways to higher with COMEX spot gold resistance at $1,833 and support at $1,790 per ounce. MCX Gold October support lies at Rs 46,900 and resistance at Rs 47,600 per 10 gram.

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Sandeep Sinha
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