Gold prices gained for the fourth consecutive day by Rs 85 to Rs 40,865 per 10 grams in Mumbai's bullion market on uncertainty over the impact of the coronavirus outbreak on the global economy but the gain was capped by stronger US dollar.
The yellow metal is likely to take further cues from the Federal Reserve, and the European Central Bank minutes to be released this week.
The rate of 10 grams, 22-carat gold in Mumbai was Rs 37,432 plus 3 percent GST, while that of 10 grams, 24-carat gold was Rs 40,865 plus GST. The price of 18-carat gold was quoted at Rs 30,649 plus GST in the retail market.
According to Navneet Damani, Vice President, Motilal Oswal, gold prices held near its two-week high on uncertainty over the impact of the coronavirus outbreak on the global economy. An increase in the number of cases reported in Singapore is increasing fears in the market.
The Chinese government and other officials are trying their best to calm the market and stabilize the economy. Easy monetary, lower bond yields around the globe continue to make gold attractive in the long term.
The Broader trend on the Comex could be $1,560-1,600, and on the domestic front, prices could hover in the range of Rs 40,650-41,300, said Damani.
The gold/silver ratio, which is the amount of silver required to buy one ounce of gold, currently stands at 88.51 to 1.
Silver prices gained Rs 165 to Rs 46,165 per kg from its closing on February 14.
In the futures market, gold rates an touched an intraday high of Rs 40,925 and an intraday low of Rs 40,720 on MCX. For the April series, the yellow metal touched a low of Rs 37,530 and a high of Rs 41,567.
Gold futures for delivery in April slipped Rs 164, or 0.40 percent on the MCX trading at Rs 40,815 per 10 grams in evening's trade in a business turnover of 16,278 lots. Gold contracts for delivery in June eased Rs 225, or 0.55 percent, at Rs 40,923 per 10 grams in a business turnover of 6,448 lots.
The value of the April contract traded so far is Rs 1,986.05 crore and June contract saw the value of Rs 54.13 crore.
Similarly, Gold Mini contracts for March declined Rs 134, or 0.33 percent at Rs 40,745 in a business turnover of 8,387 lots.
Axis Securities advised its client to sell April Gold at Rs 40,820 with stop loss at Rs 40,950 and a target of Rs 40,600.
MCX Gold will be trading in a range for the session with support placed at Rs 40,690-40,570 whereas resistance is at Rs 40,950-41,015, according to Motilal Oswal.
The brokerage firm said spot gold has intraday resistance at $1,585-1,588 whereas support is at $1,572-1,565.
At 12:44 pm (GMT), spot gold was marginally down $2.97 at $1,581.35 an ounce in London trading.
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