Gold prices rose by Rs 73 to Rs 46,918 per 10 gram in the Mumbai bullion market on dollar weakness and subdued global cues. The precious metal has been trading in a narrow band amid a lack of fresh trigger as investors await tomorrow's US jobs report which will provide further cues on the Fed’s tapering timeline.
The price of 10 gram, 22-carat gold in Mumbai was Rs 42,977 plus 3 percent GST, while 24-carat 10 gram stood at Rs 46,918 plus GST. The 18-carat gold is quoted at Rs 35,189 plus GST in the retail market.
The US ADP payroll data for September came at 568,000 against an expectation of 428,000 addition, as per Reuters’ estimate.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged for the third day at 986.54 tonnes. The ETF has a market value of $55.79 billion.
The US dollar index trades slightly down at 94.22 against a basket of six rival currencies.
Spot gold eased by $4.63 to $1,758.13 an ounce at 12:35 GMT in London trading.
MCX Bulldek slipped by 1 point or 0.01 percent to 13,932 at 18:06. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices showed some strength after trading around the $1750 level. On one hand, positive US economic data and tapering concerns are weighing on the metals whereas dialogue between the US and China regarding their trade deal and debt limit concerns are supporting the metal at lower levels. Also, in yesterday's session, dollar and yields steadied a bit after rising for most of the session,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be $1,740-1,790 and on the domestic front, prices could hover in the range of Rs 46,690- 47,135.
The gold-silver ratio currently stands at 76.43 to 1, which means 76.43 ounces of silver is required to buy an ounce of gold.
Silver prices surged by Rs 801 to Rs 61,385 per kg against its closing price on October 6.
In the futures market, the gold rate touched an intraday high of Rs 46,990 and an intraday low of Rs 46,793 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 slipped Rs 98, or 0.21 percent, to Rs 46,809 per 10 gram in evening trade on a business turnover of 13,72 lots. The same for February dipped by Rs 125, or 0.27 percent, to Rs 46,986 on a business turnover of 701 lots.
The value of December and February contracts traded so far is Rs 1,248.33 crore and Rs 36.71 crore, respectively.
Similarly, the Gold Mini contract for November declined Rs 36, or 0.08 percent at Rs 46,745 on a business turnover of 15,765 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices witnessed recovery with a fall in the dollar index and weaker US bond yields. The US 10-year treasury yields fell to near 1.51 percent for the day supporting gold prices. Gold prices may limit gains on supportive US private payroll data.
We expect gold prices to trade sideways to up with COMEX spot gold resistance at $1775 and support at $1750 per ounce. MCX Gold December support lies at Rs 46,700 and resistance at Rs 47,100 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading with a negative note near $1,760 with intraday support seen at $1,753-1,746. On the domestic front, MCX Gold October is trading with mixed sentiments. Prices are sustaining above 50-SMA on the hourly chart and this SMA is acting as dynamic support for the price. We may witness bullish momentum in the evening session and prices may trade near Rs 46,900 levels.
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