Gold prices rose by Rs 122 to Rs 47,102 per 10 gram in the Mumbai bullion market on rupee depreciation and muted global cues. The precious metal was also pressured by surging Treasury yield and strength in the dollar.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,145 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,102 plus GST. The 18-carat gold is quoted at Rs 35,327 plus GST in the retail market.
“Gold prices witnessed range-bound trading hovering near $1,760 per ounce through the last week. Gold prices remained fluctuated on mixed global cues over volatile bond yields and global inflation worries. Gold prices gained on Friday on disappointed US Non-Farm payroll data while a surge in US bond yields capped upside. The US Non-farm payroll rose by 194000 in September lesser than expectation of an increase of 490000”, said Tapan Patel- Senior Analyst (Commodities), HDFC Securities.
The CFTC data showed that money managers increased their net long positions by 25,718 lots in last week.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell by 1.49 tonnes to 985.05 tonnes. The ETF has a market value of $56.15 billion.
The US dollar index trades moderately higher at 94.19 against a basket of six rival currencies.
Spot gold eased by $2.44 to $1,754.92 an ounce at 1200 GMT in London trading.
MCX Bulldek increased by 26 points or 0.19 percent to 14,035 at 17:36. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices traded steady as last week an unexpected non-farm payroll data surprised the market, increasing the safe-haven appeal. The US added only 194k jobs last month against the expectations of 500k jobs. Although it is also important to note that, with weak jobs data, the market is also digesting the fact that, the US has also reported a positive unemployment rate and average hourly earnings. In months, the US unemployment rate has fallen from 5.9% to 4.8%, which is a positive sign for the economy,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The volatility in dollar, yields, and questions regarding Fed's tapering timeline are also capping gains for prices. The economic calendar is muted for the day although inflation data and IIP from major economies and comments from fed officials will be important to see this week, he said.
The broader range on COMEX could be between $1,740-1,790 and on the domestic front, prices could hover in the range of Rs 46,700- 47,200.
The gold-silver ratio currently stands at 76.60 to 1, which means 76.60 ounces of silver is required to buy an ounce of gold.
Silver prices soared by Rs 410 to Rs 61,490 per kg against its closing price on October 8.
In the futures market, the gold rate touched an intraday high of Rs 47,137 and an intraday low of Rs 46,864 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 gained Rs 95, or 0.20 percent, to Rs 47,132 per 10 gram in evening trade on a business turnover of 13,443 lots. The same for February rose by Rs 82, or 0.17 percent, to Rs 47,293 on a business turnover of 939 lots.
The value of December and February contracts traded so far is Rs 1,462.15 crore and Rs 22.14 crore, respectively.
Similarly, the Gold Mini contract for November climbed Rs 123, or 0.26 percent at Rs 47,045 on a business turnover of 14,863 lots.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices held the upper trading range post-Friday's disappointed US job market data. However, the upside was capped after the US 10 year treasury yields rose to 1.61% for the day. The precious metals may get support from inflation worries and US economic growth.
We expect gold prices to trade sideways to higher with COMEX spot gold resistance at $1770 and support at $1740 per ounce. MCX Gold December support lies at Rs. 46800 and resistance at Rs 47,300 per 10 gram.
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