Gold prices gained Rs 193 to Rs 39,813 per 10 gram in the Mumbai bullion market snapping a five-day losing streak helped by rupee depreciation. Price was also aided by rising risk sentiment on US-China trade deal after US Treasury Secretary Steven Mnuchin said existing tariffs on China remain even if the trade deal is signed.
The rate of 10 grams 22-carat gold in Mumbai was Rs 36,469 plus 3 percent GST, while 24-carat 10 gram was Rs 39,813 plus GST. The 18-carat gold quoted at Rs 29,860 plus GST in the retail market.
According to Navneet Damani, Vice President, Motilal Oswal, gold prices edged up in the previous session after a brief fall amidst the ease-off in the uncertainties. Ahead of the signing of an interim trade deal between the two countries, a top US official said tariffs on China would stay until a Phase 2 deal is completed.
President Trump could consider easing tariffs if the two countries move quickly to seal a follow-up deal. Such updates pre and post-signing of the phase one deal scheduled today will be very important to watch for.
Broader trend on Comex could be $1,540-1,565 and on domestic front prices could hover in the range of Rs 39,300- 39,930, added Damani.
The gold/silver ratio that refers to the amount of silver required to buy one ounce of gold stood at 86.62 to 1.
Silver prices gained Rs 125 to 45,960 per kg from its closing on January 14.
Also read: Gold needs some very urgently-needed policy changes
In the futures market, gold rate touched an intraday high of Rs 39,708 and an intraday low of Rs 39,603 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 rose Rs 172, or 0.44 percent on the MCX trading at Rs 39,619 per 10 gram in evening trade in a business turnover of 12,124 lots. Gold contracts for April delivery gained Rs 179, or 0.45 percent, at Rs 39,744 per 10 gram in a business turnover of 10,906 lots. The far month June contract was trading up by Rs 206, or 0.52 percent at Rs 39,885 per 10 gram with a business volume of 327 lots.
The value of the February contract traded so far is Rs 1,945 crore and April contract saw the value of Rs 189.77 crore.
Similarly, Gold Mini contract for February jumped by Rs 177, or 0.45 percent at Rs 39,620 in a business turnover of 8,599 lots.
The gold price has been trading under the falling trend line channel, so the price is expected to trade negative. Sustaining below Rs 39,650 would drag price lower towards Rs 39,450-39,350, according to Axis Securities.
The precious metal has seen a gap-up opening intraday after a five-day sell-off. Price remains to trade under pressure in the coming days on the back of easing tension between the US and Iran.
The broking firm advised its clients to sell February gold at Rs 39,670 with a stop loss at Rs 39,800 and target of Rs 39,450.
MCX Gold has support at Rs 39,370-39,260 whereas resistance is at Rs 39,760-39,970. The bias remains sideways for the day and minor pullback can be seen near the immediate resistance level of Rs 39,760, according to Motilal Oswal.
The brokerage firm said spot gold has intraday support at $1,530 whereas resistance is at $1,575.
At 12:21 pm (GMT), spot gold was up $5.39 at $1,551.51 an ounce in London trading.
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