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Last Updated : Oct 13, 2020 11:00 PM IST | Source: Moneycontrol.com

Gold prices steady at Rs 51,147/10 gm on subdued global cues

Silver prices declined Rs 418 to Rs 62,188 per kg from its closing on October 12.

Gold prices were steady at Rs 51,147 per 10 gram in the Mumbai retail market on a weaker rupee and lacklustre global cues. The precious metal traded flat in today’s session on rebound dollar after hitting a session low of $1,915/oz.

The US dollar index trades marginally higher at 93.23 levels up 0.14 percent but has come off the highs.

The rate of 10 gram 22-carat gold in Mumbai was Rs 46,851 plus 3 percent GST, while 24-carat 10 gram was Rs 51,147 plus GST. The 18-carat gold quoted at Rs 38,360 plus GST in the retail market.

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Investors are also focusing on the numbers regarding the upcoming US election due in a couple of weeks, which are currently favouring the Democrat Joe Biden.

The International Monetary Fund (IMF) today forecasted a deep global recession this year and the world growth to be - 4.4 percent, stating that the global economic crisis is far from over due to the impact of the coronavirus pandemic.

Spot gold was trading marginally down $0.90 at $1,921.92 an ounce at 1217 GMT in London trading.

Gold holdings in SPDR ETF rose 6.1 tonnes to 1277.64 tonnes. 

MCX iCOMDEX Bullion Index inched lower 45.86 points, or 0.29 percent, at 15,668.47 at 17:49. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal said, “Gold prices inched lower on Tuesday as the dollar ticked up, although concerns over rising COVID-19 cases and hopes of a large US fiscal stimulus being eventually released capped the losses for the metal. Over the weekend President Trump had stripped down the coronavirus relief bill and suggested to use the remaining funds although now Republicans are the ones who are showing soft side and are ready to agree with President Trump's demand in the bill.” 

The broader trend on COMEX could be in the range of $1900- 1925 and on domestic front prices could hover in the range of Rs 50,550-51,100.

“COMEX gold bounced back after making a low near $1916/oz in the early session. Gold had eased amid some stability in the US dollar and continuing drag in US stimulus talks. However, supporting price is ETF inflows and fresh restrictions to limit virus spread. Although gold may remain choppy general bias may be on the upside as uncertainty about US economy may keep pressure on US dollar”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 82.24 to 1, which means the amount of silver required to buy one ounce of gold. 

Silver prices declined Rs 418 to Rs 62,188 per kg from its closing on October 12.

In the futures market, the gold rate touched an intraday high of Rs 51,078 and an intraday low of Rs 50,766 on the Multi-Commodity Exchange (MCX). For the December series, the yellow metal touched a low of Rs 48,384 and a high of Rs 56,379.

Gold futures for December delivery slipped Rs 71, or 0.14 percent, at Rs 51,036 per 10 gram in evening trade on a business turnover of 15,471 lots. The same for February eased Rs 92, or 0.18 percent, at Rs 51,149 on a business turnover of 1,002 lots.

The value of the December and February’s contracts traded so far is Rs 2,967.65 crore and Rs 5.62 crore, respectively.

Similarly, Gold Mini contract for November dropped Rs 76, or 0.15 percent at Rs 51,090 on a business turnover of 9,038 lots.

Trading strategy

Sriram Iyer, Senior Research Analyst at Reliance Securities

International Gold and silver prices are trading marginally weak on Tuesday evening trade in Asia as the dollar rebounded. However downside remained capped as a US stimulus package could be passed eventually that will boost its appeal as a hedge against the rising inflation.

Technically, LBMA Gold Spot is trading near a support of $1,920 levels where there is also a support of the Falling Trend line. However below $1,917 will active Bearish move up to $1,909-$1,900 levels. Meanwhile a bounced back from $1,920 could take prices to $1,928-$1,936 levels.

Domestic gold and silver futures on MCX are trading weak, tracking weak overseas prices. Technically, MCX Gold October is sustaining above 65-Day Moving Average at Rs 50,750 which will be immediate support for further upside rally. However Rs 51,300 levels hold immediate resistance.

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Gold prices kept lower trading on Tuesday on mixed global cues on strong equity indices and dollar recovery over US aid package hopes. Gold prices may limit downside on worries over surging virus cases in Europe and uncertainty over US elections.

We expect gold prices to trade sideways to up for the day with COMEX gold resistance at $1940, support at $1900. MCX Gold October support lies at Rs 50,700 with resistance at Rs 51,300.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Oct 13, 2020 06:34 pm
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