Gold prices were steady at Rs 49,846 per 10 gram in the Mumbai retail market as the dollar shed its gains on stimulus hope. The precious metal has lost Rs 1,774, or 3.44 percent, this week in the domestic market.
Democrats in the House of Representatives were working on a $2.2 trillion novel coronavirus stimulus package that could be voted on as soon as next week.
The rate of 10 gram 18, 22, and 24-carat gold in Mumbai was Rs 37,385, Rs 45,659 and Rs 49,846, respectively, plus 3 percent GST.
In economic news, US Labour Department reported that number of American filing jobless claims increased marginally to 870,000 last week from 866,000 a week earlier. Jobless claims stood at 12.6 million on a seasonally adjusted basis, down a bit from the prior week.
Reinforcement of lockdown in the Eurozone, reflecting the alarming increase in COVID-19 cases, and a slowdown in the business sector in the US and Europe dampened hopes of a paced economic recovery, which lent some support to gold prices.
SPDR Gold holdings were unchanged at 1,267.13 tonnes.
MCX iCOMDEX Bullion Index declined 181.17 points, or 1.19 percent, at 15,058.94 at 17:21 hours. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Spot gold was trading down $10.39 at $1,857.35 an ounce at 11:52 GMT in London trading.
Navneet Damani, Vice President, Motilal Oswal, said gold prices are on track for its worst week in over a month, although renewed hopes of more US stimulus measures limited the decline. He sees domestic retail prices hovering in the Rs 49,550-50,200 per 10 gram range.
"Physical buyers are awaiting for a further decline in gold prices before they begin with their fresh buying in the upcoming Navratri season and later Diwali season. Until then, we can expect further downtrend to be witnessed in the coming weeks in global gold prices," said Sunand Subramaniam, Senior Research Associate, Choice Broking.
The gold-to-silver ratio currently stands at 86.72 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices rose Rs 1,006 to Rs 57,477 per kg from its closing on September 24.
In the futures market, gold touched an intraday high of Rs 49,900 and a low of Rs 49,380 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 376, or 0.75 percent, at Rs 49,505 per 10 gram in evening trade on a business turnover of 3,967 lots. The same for December edged lower by Rs 451, or 0.9 percent, at Rs 49,500 on a business turnover of 13,311 lots.
The value of the October and December contracts traded so far is Rs 1,046.11 crore and Rs 3,054.34 crore, respectively.
Similarly, Gold Mini contract for October slumped Rs 471, or 0.94 percent at Rs 49,488 on a business turnover of 8,173 lots.
Trading strategySriram Iyer, Senior Research Analyst at Reliance Securities
Technically, MCX Gold October is sustaining above Rs 49,600 which is also its 100-Daily Moving Average can expect a bounce up to Rs 49,900-50,200 levels. However, below Rs 49,600 will again turn the Bearish sentiment up to Rs 49,300-49,000 in coming sessions.
MCX Silver December has bounced back from 100-DMA and formed a Bullish Candlestick where it is sustaining above Rs 58,500 level indicating a sign of Bullish Reversal. However upside resistance is at Rs 60,600-63,000 levels.Sachin Gupta, Senior Research Associate, Choice Broking
On the technical chart, Gold has taken a support at 61.8 percent retracement level and turned up from there, which indicates reversal in the counter. Moreover, Price has also found support at 100 days Simple Moving Average on the daily chart, which suggests a bullish trend in the near term. Hence, we believe Gold prices may remain bullish for near term and move towards an immediate resistance of Rs.50600. However, on the downside, Rs.49000 level would act as support for the prices.Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking
As for today, traders can go for buy in gold at Rs 49,500 levels with the stop loss of Rs 49,150 levels for the target of Rs 50,200 levels. They can also go for buy in Silver at Rs 58,500 levels, with the stop loss of Rs 57,500 levels and for the target of Rs 60,500 levels.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities
COMEX gold trades moderately lower near $1875/oz recovering from 2-month lows as recent rally in US dollar index came to a halt. Gold has recovered after managing to hold near the key $1850/oz however a sustained rise may come only if we see a significant correction in US dollar.For all commodities related news, click here
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