Gold prices rose for the eighth consecutive day on the last trading day of 2019, rising by Rs 262 to close at Rs 39,240 per 10 gram.
The rise was driven by strong global cues, weakness in the US dollar and increased speculative buying.
The yellow metal ended 2019 with a gain of 23.74 percent in rupee terms and approximately 19 percent in dollar terms. This is the second-best performance by the yellow metal in this decade (in dollar terms) after 2010.
The precious metal is trading at nearly a four-month high in the international market, above $1,500 per troy ounce in the last six days.
The rate of 10 grams 22-carat gold in Mumbai was Rs 35,944 plus 3 percent GST, while 24-carat 10 gram was Rs 39,240 plus GST. The 18-carat gold quoted at Rs 29,430 plus GST in the retail market.
Silver prices gained Rs 535 to 46,665 per kg from its closing on December 30. The white metal ended 2019 with a gain of 22.02 percent.
Kumar Jain, Vice President Mumbai Jewellers Association told Moneycontrol that gold is likely to maintain its bullish trend and prices are likely to touch Rs 40,000-41,000 in January.
Traders who have bought silver in 2011 at its peak of about Rs 75,000 could get a chance to break even as the precious metal could rise up to the level in 2020, Jain said.
The gold/silver ratio currently stands at 84.08 to 1, which means the amount of silver required to buy one ounce of gold.
In the futures market, gold rate touched an intraday high of Rs 39,270 and an intraday low of Rs 39,053 on MCX. For the February series, the yellow metal touched a low of Rs 36,098 and a high of Rs 40,806.
Gold futures for delivery in February rose Rs 219, or 0.56 percent on the MCX trading at Rs 39,190 per 10 gram in evening trade in a business turnover of 15,893 lots. Gold contracts for April delivery gained Rs 220, or 0.56 percent, at Rs 39,188 per 10 gram in a business turnover of 6,061 lots.
The value of the February contract traded so far is Rs 2,112.20 crore and April contract saw the value of Rs 296.60 crore.
Similarly, Gold Mini contract for January was higher by Rs 186, or 0.48 percent at Rs 39,127 in a business turnover of 6,241 lots.
The precious metal is trading under rising trend line channel, price is expected to trade positive. Sustaining above would push price higher towards Rs 39,300-39,400 levels and Rs 39,000 remains a strong support level, according to Axis Securities.
On the hourly chart, price is trading support of 9, 21 and 60 EMA which is a bullish sign for prices. RSI is trading at 68 indicating strong momentum in prices.
The brokerage firm advised its clients to buy February gold at Rs 39,130 per 10 gram with stop loss at Rs 39,000 and target of Rs 39,300.
MCX Gold has immediate support at Rs 39,095-38,920 whereas resistance is at Rs 39,280-39,400. The brokerage firm advised its clients to buy on dips targeting resistance level of Rs 39,280-39,400.
The brokerage firm said spot gold has key support at $1,510 whereas resistance remains at $1,540.
At 12:44 pm (GMT), spot gold was up $5.05 at $1,523.75 an ounce in London trading.