Gold prices slightly eased by Rs 79 to Rs 47,469 per 10 gram in the Mumbai bullion market tracking muted global cues. The precious metal was also pressured by a firm dollar and US treasury yields soared above 1.67 percent.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,482 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,469 plus GST. The 18-carat gold quoted at Rs 35,602 plus GST in the retail market.
“The ongoing inflation, driven by high energy prices and supply constraints worldwide, raised concerns that rate hikes could come sooner than expected, a painful prospect for gold. But recent data which showed a weaker Industrial production and lower than expected home sales in the US raise doubts for early rate hikes, have improved sentiments for bullion. Investors might keenly watch weekly Jobless data due today and a speech from Fed Chair Jerome Powell, ahead of the central bank’s meeting next month,” said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
Market participants today will focus on the weekly jobless claims data and if it is reported better than the expectations it could support the metal prices.
Two US Federal Reserve officials said that while the central bank should begin winding down its stimulus measures, it was too soon for interest rate hikes.
Russia’s gold reserves stood at 73.9 million troy ounces as of the start of October, as compared to 73.8 million troy ounces at the start of September.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund were unchanged for the third day at 980.10 tonnes, the lowest level in 2021. The ETF has a market value of $56.01 billion.
The US dollar index trades modestly higher at 93.70, up 0.19 percent against a basket of six rival currencies.
Spot gold dropped by $4.30 to $1,777.7 an ounce at 1202 GMT in London trading.
MCX Bulldek declined by 53 points or 0.37 percent to 14,284 at 17:34. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices rose for the second day in a row on the back of a weaker dollar and supply chain concerns. Although, the volatile bullion 'silver' did outpace the gains of gold posting its biggest two day run up since Jul'21. Apart from inflation expectations, weaker U.S. economic data and updates regarding U.S. -China trade war and IMF's report to cut the growth forecast for the Asia- Pacific region by 1.1% from its previous outlook, also supported the gains for bullions,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be between $1,755-1,800 and on the domestic front, prices could hover in the range of Rs 47,250- 47,780.
The gold-silver ratio currently stands at 73.02 to 1, which means 73.02 ounces of silver is required to buy an ounce of gold.
Silver prices gained by Rs 4 to Rs 65,000 per kg against its closing price on October 19.
In the futures market, the gold price touched an intraday high of Rs 47,596 and an intraday low of Rs 47,340 on the Multi-Commodity Exchange (MCX). For the December series, the yellow metal touched a low of Rs 45,705 and a high of Rs 48,899.
Gold futures for December delivery tumbled by Rs 117, or 0.25 percent, at Rs 47,382 per 10 gram in evening trade on a business turnover of 11,286 lots. The same for February slipped by Rs 134, or 0.28 percent, to Rs 47,528 on a business turnover of 2,749 lots.
The value of December and February contracts traded so far is Rs 1,400.89 crore and Rs 91.87 crore, respectively.
Similarly, the Gold Mini contract for November decreased by Rs 80, or 0.17 percent at Rs 47,300 on a business turnover of 12,022 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC securities
Gold prices traded higher supported by the weaker dollar and worries from China’s Evergrande debt crisis. The Evergrande abandoned its $2.6 bullion sale of a stake. Silver prices outperformed gold on higher demand from the industrial sector. Gold prices are supported by global inflation worries on power shortages.
We expect gold prices to trade sideways to up with COMEX spot gold resistance at $1800 and support at $1770 per ounce. MCX Gold December support lies at Rs. 47200 and resistance at Rs.47800 per 10 gram.
Axis Securities
MCX Gold price is trading inside the ascending triangle pattern by forming higher highs and higher lows, price is expected to trade positively. Any breakout above Rs 47,700 would push the price higher towards Rs 48,000-48,100 levels intraday.
The price has started trading above 9, 21 and 60 hourly EMA which is a bullish sign for the price.
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