Gold prices slipped Rs 141 to Rs 46,195 per 10 gram in the Mumbai bullion market on rupee appreciation and a rally in the stock market. The yellow metal was also weighed down by easing of coronavirus restriction in some countries, boosting 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 42,315 plus 3 percent GST, while 24-carat 10 gram was Rs 46,195 plus GST. The 18-carat gold quoted at Rs 34,646 plus GST in the retail market.
“Gold prices edged lower as equities firmed while expectations for more economic stimulus measures limited losses,” said Navneet Damani, Vice President, Motilal Oswal.
The broader trend on Comex could be $1,690-1,735 and on domestic front prices could hover in the range of Rs 45,540- 46,250.
Comex gold eased from highs on April 28 as countries announced lifting of virus-related restrictions and re-opening of the economies.
At one point, gold fell to $17,06/oz, but recovered to trade near $1,722/oz, said Ravindra Rao, VP- Head, Commodity Research at Kotak Securities.
Recovery in equity markets is indicating “risk on” causing investors to retreat from the safe haven asset like gold.
Traders will keep a close watch on US Fed meeting that will end on April 29. European central bank will meet a day later, the second important event of the week.
Strong support for Comex gold exists at $1,795/oz, which may provide floor to falling prices. On the MCX, June gold contract could take strong support near Rs 45,500, said Rao.
As India imports all of its gold, a falling rupee could push up landed prices locally. Investors can use this opportunity to build exposure to the metal as further depreciation in the rupee will add to gold returns, said by Chirag Mehta - Senior Fund Manager - Alternative Investments, Quantum Mutual Fund.
The gold/silver ratio was at 110.91 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices declined Rs 400 to Rs 41,650 per kg from its closing on April 27.
In the futures market, gold touched an intraday high of Rs 46,107 and an intraday low of Rs 45,730 on MCX. For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,327.
Gold futures for delivery in June slipped Rs 301, or 0.65 percent, on the MCX trading at Rs 45,890 per 10 gram in evening trade in a business turnover of 15,401 lots. Gold contracts for August delivery eased Rs 287, or 0.62 percent, at Rs 46,066per 10 gram in a business turnover of 4,528 lots.
The value of the June contract traded so far is Rs 2,208.27 crore and August contract saw the value of Rs 204.74 crore.
Similarly, Gold Mini contract for June declined Rs 314, or 0.68 percent at Rs 45,901 in a business turnover of 7,031 lots.
Gold prices traded lower as international spot prices fell below $1,700 in the day trade.
Gold futures at MCX for June contract fell by Rs 347 to Rs 45,844 by noon, witnessing selling pressure from rupee appreciation and recovery in equity indices, Tapan Patel- Senior Analyst (Commodities), HDFC Securities, said.
Patel said gold prices declined for the second day of the week on expectations of easing of lockdown in some Asian countries. “We expect prices to trade sideways to down for the day, with MCX Gold June support at Rs 45,700, resistance at Rs 46,100,” he said.
MCX Gold price is trading under a falling trend line channel line, price will trade negative. Sustaining below Rs 45,950 next leg of correction would drag price lower towards Rs 45,750-45,650 level intraday, according to Axis Securities.
The broking firm advised its clients to sell June Gold at Rs 45,950 with a stop loss at Rs 46,100 and a target of Rs 45,750.
At 12:16 GMT, spot gold was down by $4.45 at $1,709.43 an ounce in London trading.