Gold prices rose Rs 85 to Rs 48,444 per 10 gram in the Mumbai bullion market on rupee depreciation. The rise in coronavirus cases worldwide is lending support to the yellow metal on the upside.
However, weighing on prices is the better-than-expected US PMI data and rebound in the US Dollar Index, which is measured against a basket of six currencies, to 96.86.
The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,333, Rs 44,375 and Rs 48,444 plus 3 percent GST.
Navneet Damani, Vice President, Motilal Oswal, said gold prices inched higher, hovering near an eight-year high, as concerns over surging coronavirus cases around the world kept bullion's safety demand elevated.
India on July 6 overtook Russia to record the world's third-highest number of COVID-19 infections, while US coronavirus deaths crossed 130,000 amid a surge in cases.
US services industry activity rebounded sharply in June, almost returning to its pre-COVID-19 pandemic levels, which kept up the pressure on metal prices.
Apart from positive economic data, easing in the border tensions between India and China has reduced some fears in the market.
The broader trend on COMEX could be in the range of $1,755-1,795/oz, Damani said. "On the domestic front, prices could hover in the range of Rs 48,030-48,550 per 10 gram."
Ravindra Rao, VP- Head Commodity Research at Kotak Securities, said gold is witnessing mixed trade, amid lack of direction in the market. He warned that weighing on prices is persisting strength in equity markets due to signs of an economic recovery and expectations of additional stimulus measures.
The gold-to-silver ratio currently stands at 99.18 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices fell Rs 385 to Rs 48,870 per kg from its closing on July 6.
In the futures market, gold rate touched an intraday high of Rs 48,399 and an intraday low of Rs 48,101 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 39,200 and a high of Rs 48,982.
Gold futures for August delivery slipped Rs 50, or 0.10 percent, at Rs 48,175 per 10 gram in evening trade on a business turnover of 11,005 lots. The same for October delivery was down Rs 73, or 0.15 percent, at Rs 48,280 on a business turnover of 7,979 lots.
The value of the August and October contracts traded so far is Rs 3,316.30 crore and Rs 257.37 crore, respectively.
Similarly, Gold Mini contract for August eased Rs 47, or 0.10 percent at Rs 48,200 on a business turnover of 11,295 lots.
"Overall, the trend for gold is looking negative as it is trading below its 20 and 60-day Exponential Moving Average (EMA) and Relative Strength Index (RSI) is below 60, indicating low momentum in price," Axis Securities said. The broking firm advised its clients to sell gold around Rs 48,250 level for a target of Rs 48,170 on an intraday basis.
At 12:17 (GMT), spot gold was down $4.61 at $1,779.58 an ounce in London trading.For all commodities related news, click here