Gold rises to Rs 45,003/10 gm on weak rupee, silver falls by Rs 30

Gold prices rose marginally by Rs 156 to Rs 45,003 per 10 gram in the Mumbai retail market tracking a weak rupee and subdued global cues. The yellow metal traded in a narrow range ahead of Fed Chair Jerome Powell testimony and a stronger dollar.

The rate of 10 gram 22-carat gold in Mumbai was Rs 41,223 plus 3 percent GST, while 24-carat 10 gram was Rs 45,003 plus GST. The 18-carat gold quoted at Rs 33,752 plus GST in the retail market.

Gold is struggling for direction amid continuing volatility in the equity market and US dollar as market participants focus on bond yields.

The yellow metal prices were supported by increasing trade tension between the US and China and surging COVID cases forced countries to curb travel restriction and imposed lockdown measures.

Market participants will keep an eye on the Fed Chairman and treasury secretary Janet Yellen’s testimony on the quarterly CARES Act report.

The US dollar trades higher at 92.13, or up 0.43 percent against a basket of six rival currencies. 

The US 10-year treasury yields eased to 1.64 percent, down 3 basis point after hitting a fresh 2021 high of 1.75 percent last week.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund remained unchanged at 1052 tonnes.

Spot gold rose marginally by $0.38 to $1,739.33 an ounce at 1226 GMT in London trading.

MCX Bulldesk decreased 7 points or 0.05 percent, at 14,220 at 17:56. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal said, “Gold prices continue to trade in a narrow range as market participants await further clarity on multiple events surrounding the market. Metal prices did feel some pressure in yesterday's session amidst the gains in equity markets and dollar, although tussle between the US and China and concerns regarding new coronavirus cases across Europe capped losses.

"Many places like Germany have already imposed certain restrictive measures again to curb the spread of not only Covid-19 but also the new coronavirus variant which is spreading at a significant rate. On other hand, EU, and US both have levied sanctions on China and in retaliation the latter has also done the same, this increased heat between these power countries is supportive of the bullion.”

The broader range on COMEX could be between $1720- 1770 and on the domestic front, prices could hover in the range of Rs 44,550- 45,100.

The gold/silver ratio currently stands at 68.40 to 1, which means the number of silver ounces required to buy one ounce of gold.

Silver prices fell slightly by Rs 30 to Rs 65,787 per kg from its closing on March 22. 

In the futures market, the gold rate touched an intraday high of Rs 44,995 and an intraday low of Rs 44,776 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 gained by Rs 20, or 0.04 percent, at Rs 44,925 per 10 gram in evening trade on a business turnover of 7,683 lots. The same for June jumped Rs 62, or 0.14 percent, at Rs 45,272 on a business turnover of 9,009 lots.

The value of the April and June’s contracts traded so far is Rs 1,860.49 crore and Rs 126.18 crore, respectively.

Similarly, Gold Mini contract for April was up Rs 20, or 0.04 percent at Rs 44,905 on a business turnover of 20,655 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices kept a narrow trading range limiting downside with ease in US bond yields while fall in Turkish Lira capped upside with the stronger dollar. The lack of fresh triggers has kept the yellow metal volumes muted this week. Gold prices are getting support on pandemic worries over lockdown fears in Europe.

We expect gold prices to trade sideways to down for the day with COMEX spot gold support lies at $1710 and resistance at $1750. MCX Gold April support lies at Rs 44,600 and resistance lies at Rs 45,100.

Axis Securities

The brokerage advised its clients to sell gold at Rs 44,900 with a stop loss at Rs 45,100 and a target of Rs 44,600.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited

International gold prices are trading with bearish momentum, where resistance is at $1,755-1,745 levels. Prices are sustaining above support of $1,720-1,725. On the MCX, we may expect bullish momentum to continue where resistance levels of Rs 45,000-45,100 could be tested in the upcoming session whereas support is at Rs 44,700-44,600 levels.

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