Gold prices flat at Rs 46,446/10 gm on weak rupee, gain 3.4% for the week; silver Rs 289 a kg


Gold prices were steady at Rs 46,446 per 10 gram in the Mumbai retail market as the rupee declined for the fifth straight day despite weak global cues. The yellow metal had gained Rs 1,527 or 3.4 percent in the domestic market this week.

The rate for 10 gram 22-carat gold in Mumbai was Rs 42,545 plus 3 percent GST, while 24-carat 10 gram was Rs 46,446 plus GST. The 18-carat gold quoted at Rs 34,835 plus GST in the retail market.

The bullion metal fell on upbeat economic numbers from China increased the hopes of a speedy economic recovery, while the firm dollar added further pressure on prices.

US Federal Reserve Chief Jerome Powell stressed to keep monetary policy support to recover from the pandemic. He said that there will be millions of people who have a hard time getting jobs and will be appropriate to continue to support them.

The US dollar trades marginally higher at 92.26, or down 0.21 percent against a basket of six rival currencies. 

The US 10 year treasury yields trade firm at 1.67 percent, up 3 basis points in the evening session.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund dropped 2.6 tonnes at 1026.07 tonnes, the lowest since April 2020.

Spot gold fell by $ 10.80 to $ 1,744.82 an ounce at 1208 GMT in London trading.

MCX Bulldesk decreased 86points or 0.59 percent, at 14,557 at 17:38. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal said, “Gold prices managed to breach the important psychological level of $ 1750 and touched their highest level in more than a month, as the dollar and U.S. yields dropped and the Federal Reserve’s reiteration of its dovish policy stance also lifted bullion’s appeal. Fed policymakers remain wary about the ongoing risks of the coronavirus pandemic and are eager to reach employment and inflation goals, minutes of the U.S. central bank’s latest policy meeting showed.” 

“Market participants will focus on the Core PPI data from the U.S. although apart from that economic calendar is muted. New US claims for unemployment benefits unexpectedly rose last week, which is the second time in this month hence supporting the metal prices.” 

The broader range on COMEX could be between $ 1740- 1770 and on the domestic front prices could hover in the range of Rs 46,500- 47,100.” 

“COMEX gold trades lower near $ 1745/oz. Gold has benefitted from a drop in the US dollar index to a 2-week low on the back of disappointing jobs report and the Fed’s emphasis on keeping interest rate low. However, weighing on price is improving global growth outlook and continuing ETF outflows. Gold has given a break above the $ 1750/oz level indicating general positive momentum however whether the rally sustains or not is dependent on the trend in the US dollar”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 69.39 to 1, which means the number of silver ounces required to buy one ounce of gold.

Silver prices eased by Rs 289 to Rs 66,930 per kg from its closing on April 8.

In the futures market, the gold rate touched an intraday high of Rs 46,887 and an intraday low of Rs 46,575 on the Multi-Commodity Exchange (MCX). For the June series, the yellow metal touched a low of Rs 44,108 and a high of Rs 51,924.

Gold futures for June delivery slipped Rs 241, or 0.51 percent, at Rs 46,597 per 10 gram in evening trade on a business turnover of 12,187 lots. The same for August fell Rs 268, or 0.57 percent, at Rs 46,801 on a business turnover of 1,302 lots.

The value of June and August’s contracts traded so far is Rs 2,181.04 crore and Rs 148.69 crore, respectively.

Similarly, Gold Mini contract for May edged lower Rs 216, or 0.46 percent at Rs 46,360 on a business turnover of 18,482 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices witnessed some profit booking with dollar gain as traders and investors overcome the dovish stance from FED. Gold prices earlier were supported by ease in US bond yields and weaker dollar on higher inflation concerns.

We expect gold prices to trade sideways to down for the day with COMEX spot gold support lies at $ 1,730 and resistance at $ 1,760. MCX Gold June support lies at Rs 46,400 and resistance lies at Rs 46,900.

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

International gold is trading with bearish momentum. Prices tested $ 1,755-1,760 levels and declined from there and trading above the previous resistance of $ 1,740-1,746. MCX Gold has declined more than 200 points since morning. We may expect a minor correction to take place against the current uptrend where Rs 46,500-46,400 levels could be tested.

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