Gold prices were steady at Rs 48,359 per 10 gram in the Mumbai bullion market on rupee depreciation versus the dollar and lack of fresh triggers. The surge in global coronavirus cases and heightened risk sentiment limited the downside on the precious metal.
The rate of the 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 36,269, Rs 44,297 and Rs 48,359 plus 3 percent GST.
Navneet Damani, Vice President, Motilal Oswal, said gold prices edged higher as worries over a surge in coronavirus infections in the US dented optimism about signs of a growing economic recovery, prompting investors to seek the safe-haven metal.
In the first four days of July alone, 15 US states reported record increases in new COVID-19 cases, which has infected nearly 3 million Americans and killed about 130,000.
Today, market participants will keep their eyes on US services sector activity and ISM non-manufacturing PMI number, a weaker-than-expected number could lend support to the metal.
The broader trend on the COMEX could be in the range of $1750-1795/oz and on the domestic front, prices could hover in the range of Rs 47,670-48,300 per 10 gram, Damani said.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities, expects gold to continue to witness choppy trade amid mixed factors. "However, the general bias may be on the upside amid increasing worries about virus cases in the US."
The gold-to-silver ratio currently stands at 98.18 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices rose Rs 700 to Rs 49,255 per kg from its closing on July 3.
In the futures market, gold touched an intraday high of Rs 48,085 and an intraday low of Rs 47,775 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 39,200 and a high of Rs 48,982.
Gold futures for August delivery gained Rs 27, or 0.06 percent, at Rs 48,073 per 10 gram in evening trade on a business turnover of 11,526 lots. The same for October delivery was up Rs 49, or 0.10 percent, at Rs 48,208 on a business turnover of 7,443 lots.
The value of the August and October contracts traded so far is Rs 3,580.55 crore and Rs 190.46 crore, respectively.
Similarly, Gold Mini contract for August was marginally down Rs 7, or 0.01 percent at Rs 48,072 on a business turnover of 11,977 lots.
On the technical charts, gold is trading near a strong support zone. "Sustaining below Rs 48,000 would push price lower towards Rs 47,700-47,600 level in the coming sessions. On the hourly chart, it has started trading below its 60-day exponential moving average (EMA), suggesting any pullback should be used for selling. The Relative Strength Index (RSI) is trading below 43, suggesting the bearishness will continue," Axis Securities.
At 12:07 (GMT), spot gold was up $3.39 at $1,779.38 an ounce in London trading.
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