Gold prices fell for the second successive day, declining Rs 509 to Rs 46,290 per 10 gram in the Mumbai bullion market on May 27, tracking weak global cues.
The precious metal was weighed down by increased appetite for riskier assets and rally in the stock market amid optimism about re-opening of the global economy.
The rate of 10 gram of 22-carat gold in Mumbai was Rs 42,402 plus 3 percent GST, while 24-carat 10 gram was Rs 46,290 plus GST. The 18-carat gold quoted at Rs 34,718 plus GST in the retail market
Gold slipped below the $17,00 oz level as equity markets managed to hold on to the gains. European equity markets were up over 1 percent while DJIA futures were 300 points higher, said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.
The US dollar index retreated from intraday high to trade little changed near 99 levels after a decline of 1 percent a day earlier, he said.
He said that US-China tensions had increased safe-haven appeal for the US currency while firmer equities limited the upside. Though in the near term gold might witness some more correction, escalating US-China tensions and stimulus measures would support gold at lower levels.
Navneet Damani, Vice President, Motilal Oswal, said US consumer confidence nudged up in May, suggesting the worst of the coronavirus-driven economic slump was likely in the past as the country starts to reopen.
Amidst this chaos, US housing numbers were reported positive, giving a shock to the market hence pulling the gold prices down.
The broader trend on Comex could be in the range of $1,690-1,715 and on the domestic front, prices could hover in the Rs 46,020-46,685 range, said Damani.
The gold/silver ratio currently stands at 98.48 to 1, which means the amount of silver required to buy one ounce of gold.
Silver was down Rs 625 to Rs 47,000 per kg from its closing on May 26.
In the futures market, gold touched an intraday high of Rs 46,352 and an intraday low of Rs 45,802 . On the Multi-Commodity Exchange, the yellow metal for the June series touched a low of Rs 36,572 and a high of Rs 47,980.
Gold futures for June delivery declined Rs 371, or 0.80 percent, to Rs 45,951 per 10 gram in the evening trade on a business turnover of 5,764 lots. The same for August delivery lowered by Rs 372, or 0.80 percent, at Rs 46,170 on a business turnover of 12,632 lots.
The value of the June and August contracts traded so far is Rs 3,046.20 crore and Rs 938.53 crore, respectively.
Similarly, Gold-Mini contract for June slipped Rs 411, or 0.89 percent at Rs 45,982 on a business turnover of 6,958 lots.
Axis Securities advised its clients to sell June Gold at Rs 46,150 with stop loss at Rs 46,300 and a target of Rs 45,900.
On MCX, gold is expected to trade negatively with resistance at Rs 46,400 and intermediate resistance at Rs 46,250, according to Motilal Oswal. The broking firm advised clients to sell on rise, targeting lower support at Rs 46,000-45,900.
The brokerage firm said spot gold would trade in the $1,690-1,730 range with negative bias.
At 1215 pm, spot gold was down by $10.85 at $1,700.70 an ounce in London trading.
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