Gold prices edged higher for the second successive day by Rs 157 to Rs 47,653 per 10 gram in the Mumbai bullion market, tracking global cues and rupee depreciation. The metal gained as worries grew over coronavirus cases in Beijing and the US.
The rate of 10 gram 22-carat gold in Mumbai was Rs 43,650 plus 3 percent GST, while 24-carat 10 gram was Rs 47,653 plus GST. The 18-carat gold quoted at Rs 35,740 plus GST in the retail market.
Navneet Damani, Vice President, Motilal Oswal, said gold traded in a narrow range as fears of a second wave of coronavirus infections buoyed demand for the safe-haven asset, but a stronger US dollar and hopes of a swift economic recovery limited the upside.
A surge in new infections in several US states and the imposition of travel curbs in Beijing to stop a new outbreak served as a reminder of the risks of reopening economic activity before a vaccine has been developed.
Data showed initial claims for state unemployment benefits in the United States dropped for the 11th straight week. US President Donald Trump on June 18 renewed threat to cut ties with China, a day after his top diplomats held talks within Beijing.
The broader trend on Comex could be in the range of $1,710-1,745/oz and on the domestic front, prices could hover in the Rs 47,100-47,600 range.
Ravindra Rao, VP-Head Commodity Research, Kotak Securities, said gold prices were trading 0.4 percent higher near $1,738/oz though global risk appetite had improved amid positive development on the US-China trade front along with hopes that record stimulus from central banks and government may be able to revive growth.
On the US-China front, sentiments improved after China said it planned to accelerate purchases of American farm goods to comply with the phase one trade deal. With no major data due from the US during the day, the focus may be on comments by various Fed officials, including chair Jerome Powell, and its impact on the dollar.
The gold/silver ratio currently stands at 99.08 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices fell Rs 265 to Rs 48,095 per kg from its closing on June 18.
In the futures market, gold touched an intraday high of Rs 47,520 and an intraday low of Rs 47,328 on the Multi-Commodity Exchange (MCX). For the August series, the metal touched a low of Rs 39,200 and a high of Rs 48,190.
Gold futures for August delivery gained Rs 139, or 0.29 percent, at Rs 47,494 per 10 gram in the evening trade on a business turnover of 14,233 lots. The same for October delivery rose Rs 97, or 0.20 percent, at Rs 47,588 on a business turnover of 5,631 lots.
The value of the August and October contracts traded so far is Rs 1,891.64 crore and Rs 23.77 crore, respectively.
Similarly, the Gold-Mini contract for July jumped Rs 122, or 0.26 percent at Rs 47,450 on a business turnover of 10,894 lots.
MCX Gold price is expected to trade in a range-bound market, having support at Rs 47,180 and resistance at Rs 47,600, according to Motilal Oswal.
The broking firm said spot gold is expected to trade in a range of $1,715-1,747.
At 1159 GMT, spot gold was up $10.97 at $1,733.95 an ounce in London trading.
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