Gold prices were steady at Rs 51,222 per 10 gram in the Mumbai market on rupee appreciation and rally in the equity market on improved risk appetite ahead of Federal Reserve Chairman Jerome Powell's speech later tonight.
The rate of 10 gram 22-carat gold in Mumbai was Rs 46,919 plus 3 percent GST, while 24-carat 10 gram was Rs 51,222 plus GST. The 18-carat gold quoted at Rs 38,417 plus GST in the retail market.
On the data front, US Q2 GDP and weekly jobless claims are scheduled on the calendar today; better than expected number could keep pressure on the metal.
US coronavirus aid negotiations are also being watched closely for more direction in bullion. US Treasury Secretary Steven Mnuchin will testify before a House of Representatives panel next week.
“Gold prices hold steady after rising almost 1 percent in the previous session on a weaker US dollar, as investors await the speech of Fed Chairman Jerome Powell which is scheduled for tonight. Governor Powell is set to speak at a virtual Jackson Hole symposium where he is expected to provide more insight on the US central bank's strategy on inflation and monetary policy. Mixed actions and statements from both US and Chinese officials have made market participants anxious. Last week both agreed to make efforts towards complying with phase one of the trade deal; on the other hand, the US-blacklisted 24 Chinese companies and targeted individuals it said were part of construction and military actions in the South China Sea,” Navneet Damani, Vice President, Motilal Oswal.
Investors are advised to maintain a cautious approach amidst the events and data points scheduled, which could result in some volatility in the market. The broader trend on COMEX could be in the range of $1930-1965 and on the domestic front, prices could hover in the range of Rs 51,200-52,100
Market participants should consider a cautious approach moving ahead this week after a dip witnessed in the past few sessions. The broader trend on COMEX could be in the range of $1915- 1955 and on domestic front prices could hover in the range of Rs 51,500-52,200.
“COMEX gold trades moderately lower near $1949.50 /oz as traders move to the sidelines ahead of the Fed chairman’s comments. Gold has turned choppy today amid positioning ahead of Fed chairman’s comments at the Jackson Hole summit which may give more clarity on Fed’s monetary policy stance. However, the general bias may be on the upside amid weak US dollar, ETF inflows, continuing stimulus measures by major economies and persisting worries about US-China tensions,” said Ravindra Rao, VP- Head Commodity Research, at Kotak Securities.
The gold/silver ratio currently stands at 78.33 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices soared Rs 2,314 to Rs 65,388 per kg from its closing on August 26.
In the futures market, gold rate touched an intraday high of Rs 51,845 and an intraday low of Rs 51,270 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,596 and a high of Rs 56,191.
Gold futures for October delivery slipped Rs 379, or 0.73 percent, at Rs 51,400 per 10 gram in evening trade on a business turnover of 15,448 lots. The same for December delivery dipped Rs 363, or 0.70 percent, at Rs 51,651 on a business turnover of 3,373 lots.
The value of the October and December’ contracts traded so far is Rs 3,417.86 crore and Rs 145.72 crore, respectively.
Similarly, Gold Mini contract for September declined Rs 488, or 0.95 percent at Rs 51,131 on a business turnover of 9,232 lots.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities expects gold prices to trade sideways to up with support at $1920 and resistance at $1970. MCX Gold October support is at Rs 51,200 and resistance lies at Rs 52,200.
At 1207 (GMT), spot gold was down $14.24 at $1,939.97 an ounce in London trading.For all commodities related news, click here