Gold, silver slip on stronger dollar, spot gold below $1,700

Gold fell Rs 356 to Rs 45,557 per 10 gram in the Mumbai bullion market on a stronger dollar on May 5. The metal was also weighed down by easing of coronavirus restriction in many Asian and European countries, boosting the demand for riskier assets.

Major gold-trading centres have remained shut in the country due to the lockdown announced to prevent the spread of coronavirus.

The rate of 10 gram 22-carat gold in Mumbai was Rs 41,730 plus 3 percent GST, while 24-carat 10 gram was Rs 45,557 plus GST. The 18-carat gold quoted at Rs 34,168 plus GST in the retail market.

Comex gold traded lower as the reopening of economies brought back investors’ appetite for stocks. Though gold fell to $1695.40, the bulls were quick to take it back above $1700 per oz, a level strongly held by the bulls, said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.

Though there was a slight risk on, the re-emergence of US-China tensions may quickly turn the situation to risk-off supporting the yellow metal. The immediate resistance for the day is at $1,716 and support at $1,695.

Gold prices slipped as risk sentiment was lifted by easing coronavirus restrictions while brewing tensions between the United States and China over the outbreak kept the safe-haven metal near the key $1,700 per ounce level, Navneet Damani, Vice President, Motilal Oswal, said.

Italy and the US were among a slew of countries tentatively easing coronavirus lockdowns to revive economies as global deaths surpassed a quarter of a million. SPDR holdings rose 0.4 percent to 1,071.71 tonnes on May 4 from 1,067.90 tonnes on May 1.

The broader trend on Comex could be $1,680-1,725 and on domestic front prices could hover in the range of Rs 45,170-46,000.

The gold/silver ratio stands at 112.20 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices slipped Rs 700 to Rs 40,600 per kg from its closing on May 4.

In the futures market, gold touched an intraday high of Rs 45,680 and an intraday low of Rs 45,311. On MCX, the June series gold touched a low of Rs 36,572 and a high of Rs 47,327.

Gold futures for delivery in June slipped Rs 312, or 0.68 percent, on the MCX trading at Rs 45,495 per 10 gram in the evening trade in a business turnover of 13,737 lots.

Gold contracts for August delivery declined Rs 278, or 0.60 percent, at Rs 45,740 per 10 gram in a business turnover of 6,276 lots.

The value of the June contract traded so far is Rs 2,164.58 crore and the August contract saw the value of Rs 129.82 crore.

Similarly, Gold Mini contract for June eased Rs 312, or 0.68 percent at Rs 45,500 in a business turnover of 9,150 lots.

Axis Securities advised its clients to buy June gold at Rs 45,500 with stoploss at Rs 45,350 and a target of Rs 45,700.

MCX Gold is expected to trade positively with support at Rs 45,200 level and intermediate support at Rs 45,400 level, according to Motilal Oswal. The brokerage firm advised its clients to buy on dip targeting higher resistance at Rs 45,750-45,950 levels.

The broking said spot gold would trade in the $1,685-1,715 range.

At 1219 GMT, spot gold was down $3.51 at $1,698.25 an ounce in London trading.

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