Gold prices fell for the third consecutive day by Rs 100 to Rs 47,059 per 10 gram in the Mumbai retail market on firm dollar and subdued global cues. The yellow metal traded in a tight range as investors await the US Fed policy outcome next week.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,106 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,059 plus GST. The 18-carat gold is quoted at Rs 35,294 plus GST in the retail market.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund was unchanged at 998.17 tonnes. The ETF has a market value of $57.58 billion.
Market participants this week will keep an eye on the Industrial production and Inflation data expected from major economies, which could give further direction to the metal prices.
The US dollar index traded higher at 92.76, up 0.20 percent against a basket of six rival currencies.
Spot gold moderately jumped by $1.96 to $1,789.56 an ounce at 1328 GMT in London trading.
MCX Bulldesk decreased by 24 points or 0.17 percent at 14,069 at 19:00. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices continue to remain subdued after it inched lower in the previous week, amidst an uptick witnessed in US Yields and Dollar. Rising uncertainty over the US Federal Reserve's tapering timeline has also kept the market participants on the edge. Last week, the economic calendar was fairly light although, there were a few lookouts that supported the greenback. Data at end of the week showed US producer prices increased solidly in Aug., leading to the biggest annual gain in nearly 11 years. Cleveland Fed President Loretta Mester also joined with other Fed officials dialogue regarding Fed’s tapering of asset purchases by the end of this year, making it clear that weak U.S. jobs number did not make much of an impact on Fed’s course of action,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be between $1770- 1820 and on the domestic front, prices could hover in the range of Rs 46,690- 47,180.
The gold-silver ratio currently stands at 74.88 to 1, which means 74.88 ounces of silver is required to buy an ounce of gold.
Silver prices tumbled by Rs 1,191 to Rs 62,876 per kg against its closing price on September 9.
Also read: Gold prices decline for 2nd straight week, technical indicates further downside
In the futures market, the gold rate touched an intraday high of Rs 46,959 and an intraday low of Rs 46,766 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 gained Rs 54, or 0.12 percent, to Rs 46,860 per 10 gram in evening trade on a business turnover of 9,675 lots. The same for December rose by Rs 85, or 0.18 percent, to Rs 47,090 on a business turnover of 5,664 lots.
The value of October and December’s contracts traded so far is Rs 1,673.94 crore and Rs 278.58 crore, respectively.
Similarly, the Gold Mini contract for October soared Rs 60, or 0.13 percent at Rs 46,918 on a business turnover of 16,944 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices kept higher trading range halting previous decline despite of stronger dollar. Gold prices are stuck in range below $1800 per ounce on FED jitters over early asset tapering. Many Fed officials are now advocating for beginning asset tapering in 2021. Gold prices were supported by weak equity indices and US-China trade tensions.
We expect gold prices to trade sideways to up with COMEX spot gold resistance at $1,803 and support at $1,780 per ounce. MCX Gold October support lies at Rs 46,600 and resistance at Rs 47,000 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading with marginal change at $1,800 levels. MCX Gold October is trading with marginally bearish to sideways momentum, trailing below the resistance line of 15-SMA of intraday chart placed near Rs 46,900. The major support level is at Rs 46,721 – low of the previous week. If these levels are breached, we may expect more bearish momentum in the evening session.
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