Gold prices slipped by Rs 230 at Rs 46,845 per 10 gram in the Mumbai bullion market tracking weak global cues and rally in the equity market.
The rate of 10 gram 22-carat gold in Mumbai was Rs 42,910 plus 3 percent GST, while 24-carat 10 gram was Rs 46,845 plus GST. The 18-carat gold quoted at Rs 35,134 plus GST in the retail market.
"Gold price behaviour in the coming quarters will depend on the speed of global economic recovery and the duration and extent of monetary and fiscal stimulus. But over the long term, Gold will play a risk-reducing, return-enhancing role. We view the ongoing correction can be a good entry point for investors to accumulate long-term positions in the asset class," said Chirag Mehta, Sr. Fund Manager-Alternative Investments, Quantum Mutual Fund.
Navneet Damani, Vice President, Motilal Oswal, said traders hope that the ECB will deliver additional stimulus, by around 500 billion euros, when it meets tomorrow. Market participants will keep an eye on Service PMI number expected from major economies and private payroll number expected from the US SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings, rose 0.1 percent to 1,129.28 tonnes on Tuesday.
The broader trend on COMEX could be in the range of $1710-1740 and on domestic front prices could hover in the range of Rs 46,100-46,650.
Ravindra Rao, VP-Head Commodity Research at Kotak Securities said risk sentiments remains upbeat amid hopes of recovery in global economic activity along with expectation of more stimulus from major economies. Tension between US-China and ongoing social unrest in US have done little to deter the global risk- on mode. However weakness in US dollar index and ETF inflows might support gold at lower levels.
The gold/silver ratio currently stands at 96.99 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices declined Rs 1,245 to Rs 48,295 per kg from its closing on June 2.
In the futures market, gold rate touched an intraday high of Rs 46,700 and an intraday low of Rs 46,600 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,980.
Gold futures for June delivery slipped Rs 146, or 0.31 percent, at Rs 46,650 per 10 gram in evening trade on a business turnover of 26 lots. The same for August delivery gained by Rs 123, or 0.26 percent, at Rs 46,681 on a business turnover of 14,998 lots. The far month October contract was up Rs 132, or 0.28 percent to Rs 46,813 with a business volume of 5,365 lots.
The value of the August and October contracts traded so far is Rs 2,038.49 crore and Rs 62.45 crore, respectively.
Similarly, Gold Mini contract for June gained Rs 55, or 0.12 percent at Rs 46,851 on a business turnover of 188 lots.
MCX Gold is trading under negative momentum, price is expected to trade negatively. Sustaining below Rs 46,450 next leg of correction would drag price towards Rs 46,200-46,100 levels in intraday, according to Axis Securities.
The price is trading below 9, 21 and 60 EMA which is a bearish sign. The relative strength index (RSI) is trading at 40 indicating lower momentum.
Motilal Oswal said spot gold has support at $1,710-1,698 whereas resistance is at $1,732-1,740 levels.
At 12:10 pm (GMT), spot gold was down by $1.94 at $1,725.65 an ounce in London trading.
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