Gold prices rose marginally by Rs 72 to hit Rs 48,430 per 10 gram in the Mumbai retail market on the sluggish global trend and rupee depreciation. The yellow metal was pressured by strength in the US dollar and positive economic data from Eurozone.
The bullion price climbed Rs 727 or 1.52 percent during the week in the domestic market.
The price of 10 gram, 22-carat gold in Mumbai was Rs 44,362 plus 3 percent GST, while 24-carat 10 gram stood at Rs 48,430 plus GST. The 18-carat gold is quoted at Rs 36,323 plus GST in the retail market.
The second-quarter GDP growth for Eurozone economy was higher than the 1.5 percent predicted by market analysts.
The US economic growth rose slightly in Q2 to 6.5 percent, a weaker than expected increase, as strong consumption was partially offset by lagging property investments and inventory drawdowns.
US jobless claims also were higher than expectations, hence supporting the metal prices. Investors will keep an eye on the US Core PCE price index data scheduled later today.
The US dollar traded firm at 91.90, up 0.04 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund rose by 5.82 at 1,031.46 tonnes. The ETF has a market value of $60.64 billion.
Spot gold slightly fell by $0.99 to $1,827.34 an ounce at 12:20 GMT in London trading.
MCX Bulldesk eased by 12 points or 0.08 percent, at 14,732 at 17:51. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices traded higher and are set for their biggest weekly gain in more than two months, as Fed Governor Powell struck a dovish tone and put cold water on the fears regarding a rate hike and early tapering, hence boosting the safe-haven appeal. The dollar index was at a one-month low, after the U.S. central bank said the job market still had “some ground to cover” before it would pull back on monetary stimulus,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be $1814- 1832 and on the domestic front, prices could hover in the range of Rs 48,050- 48,420.
The gold/silver ratio currently stands at 71.16 to 1, which means 71.16 ounces of silver is required to buy an ounce of gold.
Silver prices jumped by Rs 172 to Rs 68,053 per kg against its closing price on July 29.
In the futures market, the gold rate touched an intraday high of Rs 48,304 and an intraday low of Rs 48,120 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 slipped Rs 91, or 0.19 percent, to Rs 48,190 per 10 gram in evening trade on a business turnover of 393 lots. The same for October dropped Rs 26, or 0.05 percent, to Rs 48,370 on a business turnover of 12,863 lots.
The value of August and October’s contracts traded so far is Rs 512.25 crore and Rs 1,286.60 crore, respectively.
Similarly, Gold Mini contract for August declined Rs 55, or 0.11 percent at Rs 48,155 on a business turnover of 1,631 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices witnessed strong buying following selling in dollar post FOMC meeting. The US FED chairman refrain from giving any hint on FED tapering in the near term and said the rate hike is far away. The dollar index fell to a four-week low which boosted buying in the yellow metal. Gold prices also got support from weak equity indices on Friday.
We expect gold prices to trade up with COMEX spot gold resistance at $1833/$1840 and support at $1820 per ounce. MCX Gold October support lies at Rs 48000 and resistance at Rs48600 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, international Gold is trading in a choppy manner near $1,830. Price bounced from the support of $1,798-1,790 levels in the previous session. On the domestic front, MCX August gold is trading with marginal positive bias. Price gave a bullish breakout after testing in a rectangle box for more than five sessions where resistance and support were at Rs 47,800 and Rs 47,300 respectively. We may witness marginal bearish momentum during the evening session and the price may trade below Rs 48,300.
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