Gold rate falls for second day in a row to Rs 47,281/10 gm, silver surges by Rs 1,137 a kg

Gold price declined for the second straight day by 105 at Rs 47,281 per 10 gram in the Mumbai retail market on firm rupee and muted global cues. The yellow metal traded in a narrow range amid lack of fresh trigger as US markets were closed for President’s Day.

The rate of 10 gram 22-carat gold in Mumbai was Rs 43,309 plus 3 percent GST, while 24-carat 10 gram was Rs 47,281 plus GST. The 18-carat gold quoted at Rs 35,461 plus GST in the retail market.

Hedge funds and money managers raised their bullish positions in COMEX gold by 925 contracts to 39,691 in the week to February 9, showed US CFTC data.

Market participants, on the other hand, will focus on the FOMC meeting minutes, retail sales and preliminary PMI data from major economies scheduled for this week.

The US dollar traded slightly lower at 90.34, or 0.14 percent against a basket of six currencies on reduced safe-haven demand.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 1,142.22 tonnes.

Spot gold was marginally down $4.74 to $1,819.88 an ounce at 1204 GMT in London trading.

MCX Bulldesk jumped 49 points or 0.33 percent, at 15,090 at 17:35. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal said, “Gold inched lower after US Treasury yields jumped to their highest in nearly 11 months in the previous session. Benchmark US Treasury yields rose to their highest levels since March, while inflation expectations edged up to a six-year high. US President Biden pushed for the first major legislative achievement of his term turning to a bipartisan group of local officials for help on his $1.9 trillion coronavirus relief plan. US Treasury Secretary Janet Yellen last week urged G7 finance leaders to "go big" with additional fiscal stimulus to recover from the COVID-19 pandemic.”

The broader range on COMEX could be between $1810- $1840 and on the domestic front, prices could hover in the range of Rs 47,100- 48,720. 

“COMEX gold trades mildly lower near $1819/oz. Gold trades in a range as support from US stimulus expectations, recent weakness in US dollar and mixed economic data from major economies is countered by continuing ETF outflows and improvement in virus situation and progress on the vaccine front. Gold may continue to witness mixed trade unless there are fresh triggers; however, general bias may be on the upside owing to US stimulus expectations”, Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 68.01 to 1, which means the number of silver ounces required to buy one ounce of gold.

Silver prices climbed by Rs 1,137 to Rs 69,514 per kg from its closing on February 12. 

In the futures market, the gold rate touched an intraday high of Rs 47,455 and an intraday low of Rs 47,229 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 46,611 and a high of Rs 51,931.

Gold futures for April delivery fell Rs 13, or 0.03 percent, at Rs 47,305 per 10 gram in evening trade on a business turnover of 12,808 lots. The same for June slipped Rs 41, or 0.09 percent, at Rs 47,470 on a business turnover of 1,633 lots.

The value of the April and June’s contracts traded so far is Rs 1,767.54 crore and Rs 39.38 crore, respectively.

Similarly, Gold Mini contract for March rose Rs 31, or 0.07 percent at Rs 47,200 on a business turnover of 19,697 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices capped upside on dollar recovery and strong Asian equity indices. The US stimulus hopes and spark in Middle East tensions may support gold prices to limit downside. The traders and investors are awaiting fresh triggers to get bullish momentum in the yellow metal.

We expect gold prices to trade sideways to down with COMEX spot gold support seen at $1,800 and resistance at $1,830. MCX Gold April support lies at Rs 47,100 and resistance lies at Rs 47,600.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited

Prices are sustaining above Rs 47,000 levels and may continue the same in the upcoming session as well. Gold has support at Rs 47,200-47,000 levels whereas resistance is at Rs 47,700-47,800 levels. The market may trade between support and resistance levels during the evening session.

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