Gold prices gained Rs 62 to trade at Rs 40,076 per 10 gram in the Mumbai bullion market on January 22 due to weak dollar.
The yellow metal treaded steady in the international market ahead of European Central Bank’s first policy meet of the New Year on January 23.
The rate of 10 grams of 22-carat gold in Mumbai was Rs 36,710 plus 3 percent GST while 24-carat 10 gram was at Rs 40,076 plus GST. The 18-carat gold quoted at Rs 30,057 plus GST in the retail market.
According to Navneet Damani, Vice President, Motilal Oswal, gold prices edged a little lower after hitting the highest level in a week, as the dollar firmed and investors assessed the risk of a global epidemic from a coronavirus outbreak in China that could have an impact on the economic growth.
Precious metal prices gained in the recent past after IMF trimmed its global growth forecasts.
China's gold consumption fell for the first time in three years in 2019.
For the day, broader trend on Comex is likely to be $1,540-1,570 and on the domestic front, prices may hover in the range of Rs 39,670- 40,150.
The gold/silver ratio - the amount of silver required to buy one ounce of gold- currently stands at 86.91 to 1.
Silver prices fell by Rs 300 to Rs 46,110 per kg from its closing on January 21.
In the futures market, gold rate touched an intraday high of Rs 39,974 and an intraday low of Rs 39,752 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 by Rs 49, or 0.12 percent on the MCX trading to Rs 39,860 per 10 gram in evening trade in a business turnover of 10,747 lots.
Gold contracts for April delivery slid Rs 70, or 0.17 percent, to Rs 39,961 per 10 gram in a business turnover of 12,584 lots. The far month June contract was trading up by Rs 2, or 0.02 percent at Rs 40,087 per 10 gram with a business volume of 644 lots.
The value of the February contract traded so far is Rs 2,334.18 crore and April contract saw the value of Rs 244.67 crore.
Similarly, Gold Mini contract for February was down by Rs 55, or 0.14 percent at Rs 39,837 in a business turnover of 7,896 lots.
Gold price has seen recovery after testing 50 percent retracement level, price is expected to trade positive. Sustaining above Rs 39,900, the next leg of strong rally would push price higher towards Rs 40,100-40,200 level in intraday, according to Axis Securities.
On hourly chart, gold is trading above 20 and 60-EMA, which is a bullish sign for the prices.
Axis suggeted its clients to buy February gold at Rs 39,900 with stoploss at Rs 39,800 and target of Rs 40,100.
MCX Gold has support at Rs 39,670-39,580 whereas resistance is at Rs 40,050-40,220. Bias remains sideway for the day, according to Motilal Oswal.
The broking firm advised its clients that price sustainability above the immediate resistance level of Rs 40,050 will give further momentum in trend.
The brokerage firm said spot gold has key support at $1,540 whereas resistance is at $1,580.
At 12:30 pm (GMT), spot gold was down $1.66 at $1,556.05 an ounce in London trading.
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