Gold prices rose marginally to Rs 48,023 per 10 gram at the Mumbai retail market on rupee depreciation and positive global trend. The precious metal price was boosted by a retreat in Treasury yield and a weaker dollar.
The rate of 10 gram 22-carat gold in Mumbai was Rs 43,989 plus 3 percent GST, while 24-carat 10 gram was Rs 48,023 plus GST. The 18-carat gold quoted at Rs 36,017 plus GST in the retail market.
Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers, said, “London Gold, for the fifth straight session advanced and hit three-week high before declining. A rebound in the dollar weighed on the safe-haven metal ahead of the release of minutes from the US Federal Reserve's June policy meeting. The US Dollar Index rose to approximately 13-week highs around 92.66 as investors await the release of FOMC minutes for an update on the Fed's next policy steps.”
Among data, the ISM Non-Manufacturing PMI fell to 60.1 in June from an all-time high of 64 in May and compared to market forecasts of 63.5. For intraday, the outlook for MCX Gold August is positive amid a weak rupee in the day session.
"We expect the August contract to reach Rs 47,850 per 10 gram. Later in the session, market participants will be looking for clues as to when the Fed will begin to taper its pandemic-induced bond-buying spree amid a recovering economy when minutes of the June meeting are published on Wednesday”, he added.
The US dollar modestly fell to 92.44, down 0.11 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 0.35 tonne to 1,042.23 tonnes. The ETF has a market value of $60.61 billion.
Spot gold jumped by $11.25 to $1,808.24 an ounce at 1212 GMT in London trading.
MCX Bulldesk advanced 68 points or 0.46 percent, at 14,780 at 17:43. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices hover around three-week high after breaching the $1800 level in the previous session, amidst volatility in the dollar as market awaits the release of minutes from the US Federal Reserve’s June policy meeting. The U.S. 10Y fell to below the 1.4 marks, lowest in more than four months, supporting gold prices,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
“Worries regarding the rise in cases of Covid and its variants after many countries have eased their lockdown restrictions, are also lending support to the metal prices. US services industry activity grew at a moderate pace in June, likely restrained by labour and raw material shortages, resulting in unfinished work continuing to pile up,” he added.
The broader range on COMEX could be between $1,788 and $1,815 and on the domestic front, prices could hover in the range of Rs 47,500- 48,150.
The gold/silver ratio currently stands at 69.16 to 1, which means 69.16 ounces of silver is required to buy an ounce of gold.
Silver prices dropped by Rs 436 to Rs 69,428 per kg against its closing price on July 6.
In the futures market, the gold rate touched an intraday high of Rs 47,945 and an intraday low of Rs 47,655 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 44,501 and a high of Rs 49,721.
Gold futures for August delivery gained Rs 236, or 0.49 percent, to Rs 47,920 per 10 gram in evening trade on a business turnover of 10,465 lots. The same for October rose Rs 191, or 0.40 percent, to Rs 48,187 on a business turnover of 4,840 lots.
The value of August and October’s contracts traded so far is Rs 1,489.05 crore and Rs 67.39 crore, respectively.
Similarly, Gold Mini contract for August edged higher by Rs 212, or 0.44 percent at Rs 47,906 on a business turnover of 14,086 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
We expect gold prices to trade sideways to up for the day with COMEX gold support at $1790 and resistance at $1820 per ounce. MCX Gold August support lies at Rs. 47500 and resistance at Rs.48200 per 10 gram.
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