Gold price fell by Rs 594 to Rs 45,976 per 10 gram in the Mumbai retail market on a firm equity market and a sharp sell-off over the weekend in the international market. The precious metal had gained Rs 469, or 1.02 percent, last week in the domestic market.
The bullion prices reported a second monthly loss falling by 8 percent for the year as risk-on sentiments drew investors out of safe-haven assets. The yellow metals declined last week with a rise in US bond yield, which also boosted buying in the dollar.
The rate of 10 gram 22-carat gold in Mumbai was Rs 42,114 plus 3 percent GST, while 24-carat 10 gram was Rs 45,976 plus GST. The 18-carat gold quoted at Rs 34,482 plus GST in the retail market.
The CFTC data showed that money managers decreased net long positions by 186 lots in the last week.
The 10-year US T-bond yield surged more than 35 percent in February and up 50 percent since the beginning of the year. The rise in yield dented non-yielding bullion’s appeal.
The US dollar traded firm at 91.08, up 0.22 percent against a basket of six currencies, recovering 1.2 percent from last week low of 89.99.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF) decreased by 6.7 tonnes to 1,093.54 tonnes, on continued ETF outflow.
Spot gold soared by $11.51 to $1,745.91 an ounce at 1211 GMT in London trading.
MCX Bulldesk jumped 94 points, or 0.65 percent, to 14,664 at 17:44. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice-President, Motilal Oswal, said, “Gold prices rose more than 1 percent, recovering from a more than eight-month low touched in the previous session, as the dollar weakened and the US House of Representatives passed a massive $1.9 trillion stimulus package. Market participants will keep an eye on the manufacturing and services PMI data expected from major economies, and US jobs data scheduled later this week, which could trigger further volatility.”
“COMEX gold trades about 1 percent higher near $1746/oz amid progress on US stimulus front and correction in US dollar and bond yields. However, weighing on price is continuing ETF outflows. Gold plunged sharply and we are now seeing some relief rally, however sharp gains are unlikely until US bond yields correct sharply or US stimulus is approved," said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 67.15 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices declined by Rs 155 to Rs 68,466 per kg from its closing on February 26.
In the futures market, the gold rate touched an intraday high of Rs 46,139 and an intraday low of Rs 45,811 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 45,611 and a high of Rs 51,931.
Gold futures for April delivery edged higher by Rs 172, or 0.38 percent, at Rs 45,908 per 10 gram in evening trade on a business turnover of 13,610 lots. The same for June gained Rs 132, or 0.29 percent, at Rs 46,001 on a business turnover of 3,074 lots.
The value of the April and June’s contracts traded so far is Rs 2,613.85 crore and Rs 67.31 crore, respectively.
Similarly, Gold Mini contract for April jumped Rs 160, or 0.35 percent, at Rs 45,941 on a business turnover of 24,126 lots.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices witnessed pullback on Monday as bond yields eased from recent highs while the dollar index traded weak. The $1.9 trillion stimulus hopes also boosted buying in precious metals from support levels.
We expect gold prices to trade sideways to up for the day with COMEX spot gold support lies at $1,740 and resistance at $1,780. MCX Gold April support lies at Rs 45,800 and resistance lies at Rs 46,300.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
International Gold is trading below the major support level of $1,777.70-1,760.80. MCX April gold contract is moving in a marginal sideways to a downward trend. There is a range-bound movement of price in the levels of Rs 45,885-46,050. We may expect prices to test the support level in the range of Rs 45,770-45,600 and the prices may test the resistance level of Rs 46,100-46,280.
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