Gold prices rise to Rs 47,279 per 10 gm on weak rupee; silver tumbles by Rs 330 a kg

Gold prices rose by Rs 40 to Rs 47,279 per 10 gram in the Mumbai retail market on rupee depreciation and lacklustre global cues. The yellow metal traded in a narrow band as market players await August US non-farm payroll data later this week.

The price of 10 gram, 22-carat gold in Mumbai was Rs 43,308 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,279 plus GST. The 18-carat gold is quoted at Rs 35,459 plus GST in the retail market.

The focus now shifts to the Manufacturing PMI data expected from major economies, which if reported better than expected, could weigh on metal prices.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped by 1.5 tonnes to 1,000.26 tonnes. The ETF has a market value of $58.34 billion.

The US dollar index traded mildly lower at 92.58, down 0.06 percent against a basket of six rival currencies.

Spot gold marginally rose by $1.38 to $1,815.08 an ounce at 1232 GMT in London trading.

MCX Bulldesk slightly soared by 29 points or 0.21 percent at 14,170 at 18:02. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold prices did witness some intraday volatility within its broad range above $1,800 in yesterday's session. Economic data releases, fear of rising Covid cases, and cautious wait for the key US jobs report scheduled later this week, for clues on when the Fed might start reducing its pandemic-era stimulus measures, have affected the market. US nonfarm payrolls data is expected to help shape the Fed’s stance on monetary policy. US consumer confidence fell to a six-month low in August as worries about soaring COVID-19 infections and higher inflation dimmed the outlook for the economy,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.

“There are a lot of travel and lockdown restrictions which the countries are considering amidst the delta variant fear. After Fed, ECB officials also showed concerns regarding rising inflation, consideration of tapering by next quarter,” he said.

The broader range on COMEX could be $1,795-1,825 and on the domestic front, prices could hover in the range of Rs 46,930-47,435.

The gold-silver ratio currently stands at 74.96 to 1, which means 74.96 ounces of silver is required to buy an ounce of gold.

Silver prices fell by Rs 330 to Rs 63,072 per kg against its closing price on August 31.

In the futures market, the gold rate touched an intraday high of Rs 47,209 and an intraday low of Rs 47,030 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,662 and a high of Rs 50,040. 

Gold futures for October delivery jumped by Rs 82, or 0.17 percent, to Rs 47,202 per 10 gram in evening trade on a business turnover of 11,248 lots. The same for December rose by Rs 84, or 0.18 percent, to Rs 47,351 on a business turnover of 3,599 lots.

The value of October and December’s contracts traded so far is Rs 1,328.33 crore and Rs 47.75 crore, respectively.

Similarly, the Gold Mini contract for November gained Rs 94, or 0.20 percent at Rs 47,246 on a business turnover of 15,809 lots.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Gold prices kept range-bound trading off the recent highs on a stronger dollar and positive equity indices. The dollar index was trading 0.06 percent up in the morning trade. The traders and investors are eyeing key US Job market data this week which may indicate FED's mood over asset tapering. 

We expect gold prices to trade sideways to up with COMEX spot gold resistance at $1,833 and support at $1,795 per ounce. MCX Gold October support lies at Rs 46,800 and resistance at Rs 47,400 per 10 gram.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited

Technically, International Gold is trading with a marginal change below $1,820. The market may rise and trade above $1,820-1,825 levels during the evening hours. On the domestic front, MCX Gold October is trading in a choppy manner. We may expect the prices to trade with bullish bias in the evening session and test Rs 47,300 levels.

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