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Gold prices rise by Rs 583 to Rs 46,434/10 gram, silver spikes by Rs 1,463 a kg

Patel expects gold prices to trade sideways to higher with COMEX spot gold resistance at $1770 and support at $1740 per ounce.

Mumbai / October 01, 2021 / 06:04 PM IST

Gold prices surged Rs 583 to Rs 46,434 per 10 gram in the Mumbai bullion market tracking a sharp spike in the global market overnight as dollar dipped after US jobless claims rose for the third straight week. The yellow metal rose Rs 160 or 0.35 percent during the week in the domestic market.

The price of 10 gram, 22-carat gold in Mumbai was Rs 42,534 plus 3 percent GST, while 24-carat 10 gram stood at Rs 46,434 plus GST. The 18-carat gold is quoted at Rs 34,826 plus GST in the retail market.

“Gold bounced from its support of $1,720 and remained supported near major Pivot level of $1,750 as traders are still worried about rising inflation and growth sentiment, absence of Chinese traders in the evening session played an important role in this bounce. On the MCX, technically Rs 46,450 remains important resistance above which it can touch Rs 46,600-Rs 46,750 while a break below Rs 46,280 negates the view”, said Vidit Garg, Director, MyGoldKart.

On the data front, an unexpected rise was witnessed in weekly US jobless claims to a seasonally adjusted 362,000. Whereas, amidst the push from the stimulus measures announced by the government, we saw a rise in US GDP by 1 percent from the expectations.

Today, market participants will keep an eye on the Manufacturing PMI data expected from major economies and the US Core PCE price index.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund remained unchanged for the second day at 990.03 tonnes. The ETF has a market value of $55.45 billion.

The US dollar index traded marginally lower at 94.06, down 0.18 percent against a basket of six rival currencies.

Spot gold dropped by $3.67 to $1,753.24 an ounce at 12:05 GMT in London trading.

MCX Bulldesk advanced by 8 points or 0.06 percent at 13,766 at 17:36. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold is trading steady near $1750, after rising by almost 2% in yesterday’s session, as Fed's concerns regarding US jobs scenario when weekly claims were reported better than the expectations. Although, comments regarding Fed's tapering timeline and interest rate change are limiting gains for the metals. Chicago Fed President mentioned that supply shocks that are pushing up on prices now will ease next year, and low-interest rates will still be needed to bring US inflation back durably to 2%,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.

He said that the broader range on COMEX could be between $1720- $1765 and on the domestic front prices could hover in the range of Rs 46,135- Rs 46,700.

The gold-silver ratio currently stands at 77.93 to 1, which means 77.93 ounces of silver is required to buy an ounce of gold.

Silver prices climbed by Rs 1,463 to Rs 59,581 per kg against its closing price on September 30.

In the futures market, the gold rate touched an intraday high of Rs 46,295 and an intraday low of Rs 46,155 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,479 and a high of Rs 50,040. 

Gold futures for October delivery slipped Rs 138, or 0.30 percent, to Rs 46,185 per 10 gram in evening trade on a business turnover of 76 lots. The same for December fell by Rs 162, or 0.35 percent, to Rs 46,359 on a business turnover of 13,379 lots.

The value of October and December’s contracts traded so far is Rs 4.62 crore and Rs 1,083.16 crore, respectively.

Similarly, the Gold Mini contract for November slides Rs 153, or 0.33 percent at Rs 46,276 on a business turnover of 16,463 lots.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Gold prices have capped upside today on the stronger dollar after gaining in the previous trading session. Gold prices witnessed a strong rebound on Thursday on inflation worries despite firm US bond yields. The rising oil prices along with power shortage may result in higher input costs hurting economic recovery. 

We expect gold prices to trade sideways to higher with COMEX spot gold resistance at $1770 and support at $1740 per ounce. MCX Gold December support lies at Rs 46,200 and resistance at Rs 46,700 per 10 gram.

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

Technically, International Gold is trading with a positive note above $1,750. On the domestic front, we may witness a marginal sideways and negative momentum till the US market opens in the evening, after which volatility could be expected.

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Sandeep Sinha