Gold prices steady at Rs 44,791/10 gm ahead of Fed decision, silver falls by Rs 286 a kg

gold silver metals

Gold prices fell marginally by Rs 70 to Rs 44,791 per 10 gram in the Mumbai retail market on subdued global cues. The yellow metal traded steady ahead of the Fed's rate-setting meet outcome that is slated to be announced later in the day.

The rate of 10 gram 22-carat gold in Mumbai was Rs 41,029 plus 3 percent GST, while 24-carat 10 gram was Rs 44,791 plus GST. The 18-carat gold quoted at Rs 33,593 plus GST in the retail market.

The US dollar traded higher at 91.94, or up 0.07 percent against a basket of six rival currencies. 

The US 10-year treasury yields surged to 1.66 percent, up 4 basis points denting the non-yielding metal’s appeal.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 1,050.32 tonnes, the lowest since April 2020.

Spot gold eased marginally by $0.74 to $1,730.84 an ounce at 12:44 GMT in London trading.

MCX Bulldesk rose 24 points or 0.17 percent, at 14,276 at 18:15 hours. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal said, “Gold prices continue to hover around the one week high as the dollar stood firm, with investors eyeing the outcome of the US Federal Reserve's two-day meeting for its outlook on the economy. The central bank is expected to maintain a dovish stance and keep the interest rates lower although based on market expectations, comments regarding further stimulus and measures to control the volatility in yields will be very important to watch for. US retail sales fell more than expected in February amid cold weather across the country, but a rebound is likely as government disburses another round of pandemic relief money.” 

"On one side there is optimism regarding the vaccination drive, whereas on other side, rise in COVID-19 and a new variant of coronavirus cases and the restrictive measures to control the spread of same has created a strong floor for the metal”, he added. 

The broader range on COMEX could be between $1715- $1765 and on the domestic front, prices could hover in the range of Rs 44,700- Rs 45,350.

“COMEX gold trades mixed near $1732/oz ahead of the Fed decision later today. Support from Europe’s vaccination concerns, Chinese equity market sell-off and US stimulus deal is countered by weaker investor interest and higher bond yields. Gold may remain choppy ahead of Fed decision however general bias may be on the upside amid expectations that Fed and other central banks may maintain dovish stance”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 67.19 to 1, which means the number of silver ounces required to buy one ounce of gold.

Silver prices decreased by Rs 286 to Rs 66,654 per kg from its closing on March 16. 

In the futures market, the gold rate touched an intraday high of Rs 45,037 and an intraday low of Rs 44,795 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 44,150 and a high of Rs 51,931.

Gold futures for April delivery gained by Rs 77, or 0.17 percent, to Rs 44,890 per 10 gram in evening trade on a business turnover of 8,985 lots. The same for June jumped by Rs 59, or 0.13 percent, to Rs 45,250 on a business turnover of 7,726 lots.

The value of the April and June’s contracts traded so far is Rs 1,906.79 crore and Rs 241.87 crore, respectively.

Similarly, Gold Mini contract for April edged higher by Rs 66, or 0.15 percent at Rs 44,886 on a business turnover of 22,905 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices rose for the third day of the week ahead of the US FOMC meeting. The traders and investors are eyeing comments from the US Fed chair as any change in asset purchasing decision may boost buying in precious metal.

We expect gold prices to trade sideways to up for the day with COMEX spot gold support being at $1710 and resistance at $1,740/1,760. MCX Gold April support lies at Rs 44,600 and resistance lies at Rs 45,200.

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

We expect international gold to trade below resistance levels of $1,735-$1,745. MCX Gold has been trading below the resistance of Rs 45,000- Rs 45,200 levels. If prices breach the resistance levels, then Rs 45,500 levels could be tested on the upside. Gold has major support at Rs 44,300-Rs 44,150 levels.

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