Gold prices rose by Rs 163 to Rs 46,845 per 10 gram in the Mumbai bullion market on sharp depreciation in the rupee amid subdued global trends. However, a rally in the 10-year Treasury yield and firm dollar limit the upside.
The price of 10 gram, 22-carat gold in Mumbai was Rs 42,910 plus 3 percent GST, while 24-carat 10 gram stood at Rs 46,845 plus GST. The 18-carat gold is quoted at Rs 35,134 plus GST in the retail market.
Investors are waiting for non-farm payroll data, which if recorded better than expected, could further shape the Fed's taper timeline and put pressure on metal prices. Today, the focus will be on the important U.S. private payroll data.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged for the second day at 986.54 tonnes. The ETF has a market value of $55.58 billion.
The US dollar index trades 0.56 percent higher at 94.30 against a basket of six rival currencies. The greenback trades closer to one-year high making gold expensive for holders of other currencies.
Spot gold fell by $3.15 to $1,757.03 an ounce at 12:55 GMT in London trading.
MCX Bulldesk advanced by 40 points or 0.29 percent to 13,935 at 18:26. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Bullions continue to trade lower amidst, positive U.S. economic data, and an uptick in dollar and yields. Services PMI data from major economies and US non-manufacturing data were better than expected. The US services industry activity nudged up in September, but growth is being restrained by a persistent shortage of inputs and the resulting high prices. Updates regarding the US-China trade talks at the start of the week are giving support to the metal prices,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be $1735- 1775 and on the domestic front, prices could hover in the range of Rs 46,520- 46,960.
The gold-silver ratio currently stands at 77.32 to 1, which means 77.32 ounces of silver is required to buy an ounce of gold.
Silver prices declined by Rs 321 to Rs 60,584 per kg against its closing price on October 5.
In the futures market, the gold rate touched an intraday high of Rs 46,930 and an intraday low of Rs 46,512 on the Multi-Commodity Exchange (MCX). For the December series, the yellow metal touched a low of Rs 45,705 and a high of Rs 48,899.
Gold futures for December delivery soared Rs 108, or 0.23 percent, to Rs 46,865 per 10 gram in evening trade on a business turnover of 13,517 lots. The same for February jumped by Rs 133, or 0.28 percent, to Rs 47,031 on a business turnover of 614 lots.
The value of December and February contracts traded so far is Rs 1,931.86 crore and Rs 37.03 crore, respectively.
Similarly, the Gold Mini contract for November edged higher Rs 128, or 0.27 percent at Rs 46,772 on a business turnover of 16,091 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices traded lower with firm dollar and rally in US bond yields. The US 10 year treasury yields were trading up near 1.55 percent for the day pressuring bullion prices. The precious metals capped downside on inflation worries over higher energy costs. We expect gold prices to trade sideways to down with COMEX spot gold resistance at $1760 and support at $1730 per ounce. MCX Gold December support lies at Rs 46,200 and resistance at Rs 46,800 per 10 gram.
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