Gold prices declined by Rs 385 to Rs 48,810 per 10 gram at Mumbai retail market on rupee appreciation and lacklustre global cues. The precious metal showed signs of exhaustion as it is unable to hold above $1,900/oz psychological level as Treasury yield spike ahead of US GDP data to be released later in the day.
The rate of 10 gram 22-carat gold in Mumbai was Rs 44,710 plus 3 percent GST, while 24-carat 10 gram was Rs 48,810 plus GST. The 18-carat gold quoted at Rs 36,608 plus GST in the retail market.
Fed and other central banks official have so far maintained support for accommodative policy amid persisting challenges however some Fed officials are preparing to start a discussion over tapering.
The US dollar traded modestly lower at 90.01, down 0.01 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 2 tonnes to 1,044.08 tonnes on profit-booking by ETF investors.
Spot gold was marginally weaker by $5.42 to $1,891.36 an ounce at 1223 GMT in London trading.
MCX Bulldesk dropped 81 points or 0.53 percent, at 15,180 at 17:54. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices eased a bit after breaching the psychological level of $1900 amidst an uptick witnessed in US Yields, as investors await key economic readings from the United States later in the day. The dollar index continues to hover around the 4-1/2 month lows whereas U.S. 10Y yields rose to 1.6%. Fed vice chair for supervision said that he was prepared for the talks regarding, reducing the central bank's emergency support measures”, Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services.
“On other hands, ECB official commented that the central bank could continue to support the idea of no reduction in asset purchases. Market participants will keep an eye on any update regarding President's Biden's infra bill. Along with that focus will also remain on the U.S. GDP and weekly jobless claims data scheduled later in the day”, he added.
The broader range on COMEX could be between $1880- 1915 and on the domestic front, prices could hover in the range of Rs 48,650- 49,180.
The gold/silver ratio currently stands at 69.08 to 1, which means 69.08 ounces of silver is required to buy an ounce of gold.
Silver prices tumbled by Rs 1,216 to Rs 70,650 per kg against its closing price on May 26.
In the futures market, the gold rate touched an intraday high of Rs 48,870 and an intraday low of Rs 48,550 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 150, or 0.31 percent, to Rs 48,634 per 10 gram in evening trade on a business turnover of 3,334 lots. The same for August slides Rs 101, or 0.21 percent, to Rs 49,124 on a business turnover of 11,513 lots.
The value of June and August’s contracts traded so far is Rs 2,408.84 crore and Rs 1,281.71 crore, respectively.
Similarly, Gold Mini contract for June slumped by Rs 129, or 0.26 percent at Rs 48,599 on a business turnover of 9,535 lots.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices held grounds near $1900 per ounce as investors gauged inflation worries speculating US FED will soon start to unwind stimulus measures. Federal Reserve Vice Chairman for Supervision Randal Quarles said on Wednesday that it will be important for the US central bank to begin discussing in the coming months' plans to reduce its massive bond purchases. The market is awaiting US GDP and jobless claims data due in the evening session.
We expect gold prices to trade sideways to up for the day with COMEX gold support at $1,890 and resistance at $1,920 per ounce. MCX Gold June support lies at Rs 48,500 and resistance at Rs 49,000 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold breached the psychological levels of $1,900 in the previous session and the market was unable to sustain above them. On the MCX, prices declined more than 300 points during the closing hour of the previous session and continued to trade with the same momentum today as well. We may expect the market to rise and trade near Rs 48,800 levels in the evening session.
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