Gold prices were steady at Rs 44,680 per 10 gram in the Mumbai retail market on subdued global cues and a firm rupee. The precious metal was further pressured downward by surging Treasury bond yield and US dollar.
The rate of 10 gram 22-carat gold in Mumbai was Rs 40,927 plus 3 percent GST, while 24-carat 10 gram was Rs 44,680 plus GST. The 18-carat gold quoted at Rs 33,510 plus GST in the retail market.
The yellow metal showed mild weakness after solid gains on March 9. Gold in the global spot market ticked lower after posting the biggest jump in two months in the previous session.
Fundamentally, prices could correct further especially after factoring in the upbeat global sentiment due to improving vaccine roll-outs and decline in COVID-19 cases. However, in the short term, markets could track the movement of the greenback and the bond yields and could be data-dependent, said Sriram Iyer, Senior Research Analyst at Reliance Securities.
The US dollar traded firm at 92.15, or up 0.21 percent, against a basket of six rival currencies. While the 10-year US T-bond yield jumped to 1.56 percent.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined by 1.5 tonnes to 1,061.98 tonnes.
Spot gold fell $4.03 to $1,711.82 an ounce at 1208 GMT in London trading.
MCX Bulldesk decreased 77 points, or 0.54 percent, at 14,217 at 17:39. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President, Motilal Oswal, said, “Gold price continue to inch higher after a retreat in US Treasury yields and the dollar which lifted the metal’s appeal. The world economy is set to rebound this year with 5.6 percent growth and expand 4 percent next year, the OECD said in its interim economic outlook capping some gains for the metal.”
“COMEX gold trades 0.4 percent lower near $1710/oz. Gold rallied sharply yesterday on correction in US bond yields and US dollar. Gold however eased today as the US dollar recouped some losses. While gold sways along with the US dollar, support from the US stimulus and Chinese equity market sell-off is countered by weaker investor interest. Gold may continue to sway along with US dollar however a sharp rise is unlikely unless bond yields correct sharply," said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 67.31 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices rose by Rs 83 to Rs 66,370 per kg from its closing on March 9.
In the futures market, the gold rate touched an intraday high of Rs 44,823 and an intraday low of Rs 44,630 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 44,150 and a high of Rs 51,931.
Gold futures for April delivery edged lower by Rs 162, or 0.36 percent, at Rs 44,695 per 10 gram in evening trade on a business turnover of 11,398 lots. The same for June slipped Rs 95, or 0.21 percent, at Rs 45,013 on a business turnover of 5,996 lots.
The value of the April and June’s contracts traded so far is Rs 2,342.39 crore and Rs 263.69 crore, respectively.
Similarly, Gold Mini contract for April slides Rs 136, or 0.30 percent at Rs 44,708 on a business turnover of 26,642 lots.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices witnessed recovery from nine-month lows as US bond yields eased from 1 year highs while the dollar index traded off the three and a half month highs. The rally in equity indices and the firm dollar may limit upside in precious metals for the day.
We expect gold prices to trade sideways to down for the day with COMEX spot gold support lies at $1,690 and resistance at $1,730. MCX Gold April support lies at Rs 44,500 and resistance lies at Rs 44,900.
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