Gold slips Rs 970 to Rs 39,881 per 10 grams, silver sheds Rs 1,420 to Rs 46,375 per kg

The rate of 10 gram 22-carat gold in Mumbai was Rs 47,640 plus 3 percent GST, while 24-carat 10 gram was Rs 52,009 plus GST

Gold prices fell Rs 970 to Rs 39,881 per 10 grams on Mumbai's bullion market over the global stock market rally and rupee appreciation. The precious metal cooled off from its lifetime high of Rs 40,851 in India after both Iran and US signalled the softening of their stance over eased concerns of larger military conflict.

The rate of 10 grams, 22-carat gold in Mumbai was at Rs 36,531 plus 3 percent GST, while that of 10 grams, 24-carat gold was at Rs 39,881 plus GST. The price of 18-carat gold quoted at Rs 29,911 plus GST in the retail market.

Gold prices retraced from its seven-year highs as softening rhetoric on the US and Iran calmed concerns of a larger military conflict. The much awaited speech by US President Trump on the attack in Iraq on US forces by Iran did not quite impress bullion markets.

On the other hand, positive private jobs data increased expectations for a positive non-farm payroll number scheduled for tomorrow putting further pressure on metal prices. The broader trend on the Comex could be $1,530-1,560, and on the domestic front, prices could hover in the range of Rs 39,500- 40,150, said Navneet Damani, Vice President, Motilal Oswal.

The gold/silver ratio, which is the amount of silver required to buy one ounce of gold, currently stands at 85.99 to 1.

Silver prices shed Rs 1,420 to 46,375 per kg from its closing on January 8.

In the futures market, gold rate touched an intraday high of Rs 40,144 and an intraday low of Rs 39,610 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 fell Rs 229, or 0.57 percent on MCX trading at Rs 39,881 per 10 grams in evening trade for a business turnover of 13,076 lots. Gold contracts for April delivery slipped Rs 272, or 0.67 percent, at Rs 40,040 per 10 grams for a business turnover of 10,098 lots.

The value of the February contracts traded so far is at Rs 4,863.38 crore, and that of April contracts saw a value of Rs 409.99 crore.

Similarly, Gold Mini contracts for February were down by Rs 238, or 0.59 percent at Rs 39,840 for a business turnover of 9,144 lots.

According to Axis Securities, gold price has seen a strong sell-off in the last session on hopes of easing US-Iran tensions, and its price remains to trade negative. Sustaining below Rs 39,850 may drag the price lower towards Rs 39,650-39,550 levels.

On hourly chart, 60 EMA has given negative cross over of 20 EMA, which is a bearish sign. The Relative Strength Index is at 25, which indicates low momentum in prices.

The brokerage firm advised its clients to sell February gold at Rs 39,850 with a stop loss at Rs 40,000 and a target of Rs 39,650.

MCX Gold has its intraday support at Rs 39,530-39,460, whereas resistance is at Rs 40,070. A pullback towards the resistance area could be seen for the session, according to Motilal Oswal.

The brokerage firm said spot gold has its intraday support at $1,535, whereas resistance is at $1,560-1,568.

At 1:15 pm (GMT), spot gold was down $6.70 at $1,553.55 an ounce in London trading.

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