Gold prices soared by Rs 340 to Rs 45,259 per 10 gram in the Mumbai retail market on a sharp fall in rupee despite muted global cues. In the international market, the yellow metal traded with marginal losses as strong US job growth boosted hopes of quick economic recovery, thus reducing safe-haven appeal.
The rate of 10 gram 22-carat gold in Mumbai was Rs 41,457 plus 3 percent GST, while 24-carat 10 gram was Rs 45,259 plus GST. The 18-carat gold quoted at Rs 33,944 plus GST in the retail market.
However, surging COVID cases globally and stricter restrictions imposed in many places cap the downward moves.
“MCX Gold is trading with weak undertone as the US posted strong jobs growth on last Friday. The dollar index appreciated to 93.05, hovering at levels not seen since November of 2020 amid prospects of a strong US economic recovery. The US economy created the most jobs in 7 months in March, the payrolls report showed, and President Biden unveiled a $2.25 trillion infrastructure plan to boost the economic recovery, although the package is likely to face strong GOP opposition especially over a corporate tax hike increase to 28%. MCX Silver too declined sharply as sentiment turned weak in the bullion commodities,” said Jigar Trivedi, Research Analyst- Commodities Fundamental at Anand Rathi Shares & Stock Brokers.
The US dollar traded mildly lower at 92.98, or down 0.07 percent against a basket of six rival currencies.
The US 10-year treasury yields jumped to 1.73 percent, up 1 basis point in the evening session.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 4.6 tonnes to 1032.83 tonnes.
Spot gold fell by $5.56 to $1,724.01 an ounce at 1217 GMT in London trading.
MCX Bulldesk eased 8 points or 0.06 percent, at 14,170 at 17:48. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President, Motilal Oswal said, “Gold price edged higher in the previous session, as a rise in Covid-19 and the new variant of coronavirus are encouraging countries to take stringent measures to curb the spread of the same, although volatility in the dollar and yields continued to cap gains for the metal. Even with the vaccination drive going around the globe, EU and few countries are having some trouble with few vaccines like AstraZeneca.”
“Gold prices also got a boost after a non-farm payroll data was reported higher than expected, although 6% unemployment rate v/s 6.2% recorded in the previous month calmed the volatility a bit. Market participants will focus on the Service PMI data expected from the US.”
The broader range on COMEX could be between $1710-$1740 and on the domestic front, prices could hover in the range of Rs 45,150 - Rs 45,700.
“COMEX gold trades little changed near $1726/oz. Gold is range-bound as support from rising virus cases, US stimulus plan and retreat in US dollar from recent highs is countered by upbeat US non-farm payroll data and lack of investor buying. Gold has bounced back from recent lows however any sustained rise is unlikely unless US dollar or bond yields correct sharply”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 69.66 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices climbed by Rs 1,225 to Rs 64,962 per kg from its closing on April 1.
In the futures market, the gold rate touched an intraday high of Rs 45,464 and an intraday low of Rs 45,274 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 44,108 and a high of Rs 51,924.
Gold futures for June delivery slipped Rs 23, or 0.05 percent, to Rs 45,395 per 10 gram in evening trade on a business turnover of 12,408 lots. The same for August was marginally up Rs 5, or 0.01 percent, at Rs 45,630 on a business turnover of 379 lots.
The value of June and August’s contracts traded so far is Rs 1,326.07 crore and Rs 36.48 crore, respectively.
Similarly, Gold Mini contract for May marginally rose Rs 13, or 0.03 percent to Rs 45,230 on a business turnover of 18,053 lots.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices traded under pressure with a rise in US treasury yields despite a weaker dollar. The 10-year US Treasury yields were up at 1.72% on Monday. Gold prices have witnessed a sharp rebound from key support levels of $1680 after the infrastructure package announcement.
We expect gold prices to trade sideways to lower for the day with COMEX spot gold support seen at $1,710 and resistance at $1,740. MCX Gold June support lies at Rs 45,100 and resistance lies at Rs 45,600.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
International gold is trading with bearish momentum. Prices bounced from the lows of $1,682 - $1,675 levels in the previous session. Resistance levels of $1,725- $1,730 were tested earlier today and a decline from these levels could be expected in the upcoming sessions.
On the MCX, we may expect levels of Rs 45,150 - Rs 45,050 levels could be tested in the evening session.
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