Gold prices fell by Rs 123 to Rs 39,634 per 10 grams for the fifth consecutive day in Mumbai's bullion market as higher prices dented consumer demand and a stronger US dollar.
The rate of 10 grams, 22-carat gold in Mumbai was Rs 36,303 plus 3 percent GST, while that of 10 grams, 24-carat gold was Rs 39,634 plus GST. The price of 18-carat gold quoted at Rs 29,726 plus GST in the retail market.
According to Navneet Damani, Vice President, Motilal Oswal, gold prices fell following the de-escalation of tensions in the Middle East, and tracking optimism over the US-China trade deal that will be inked this week. All the updates, before and after the signing of the phase one deal coming from the US and China will be very important to gauge the direction of the market.
Damani also said that market participants will keep an eye on the US inflation numbers, and better-than-expected economic data could support the dollar at lower levels. The broader trend on the Comex could be $1,530-1,555, and on the domestic front, prices could hover in the range of Rs 39,200- 39,650.
The gold/silver ratio, which is the amount of silver required to buy one ounce of gold, currently stands at 86.47 to 1.
Silver prices fell Rs 430 to 45,835 per kg from its closing on January 13.
In the futures market, gold rate touched an intraday high of Rs 39,500 and an intraday low of Rs 39,262 on MCX. For the February series, the yellow metal touched a low of Rs 36,098 and a high of Rs 41,293.
Gold futures for delivery in February slipped Rs 127, or 0.32 percent on the MCX, trading at Rs 39,419 per 10 grams in evening trade in a business turnover of 12,101 lots.
Gold contracts for delivery in April eased Rs 185, or 0.47 percent, at Rs 39,523 per 10 grams in a business turnover of 10,779 lots. Contracts for June were trading down by Rs 245, or 0.61 percent at Rs 39,680 per 10 grams with a business volume of 291 lots.
The value of the February contracts traded so far are at Rs 2,823.52 crore and that of April contracts were valued at Rs 248.22 crore.
Similarly, Gold Mini contracts for February were down by Rs 151, or 0.38 percent at Rs 39,390 in a business turnover of 10,685 lots.
Axis Securities advised its clients to sell February gold at Rs 39,450 with a stop loss at Rs 39,600, and a target of Rs 39,250.
According to Motilal Oswal, MCX Gold has support at Rs 39,260-39,110, whereas resistance is at Rs 39,530-39,770. Bias remained sideways for the day and a minor pullback can be seen near the immediate resistance level of Rs 39,530.
The brokerage firm said spot gold has intraday support at $1,520 and resistance at $1,565.
At 12:22 pm (GMT), spot gold was down $5.28 at $1,542.77 an ounce in London trading.