Gold prices rose for the seventh straight day by 99 at Rs 46,545 per 10 gram on weaker rupee and surging coronavirus cases globally. The yellow metal was steady in the international market on firm US Treasury yields and continuing ETF outflows.
The precious metal rose by Rs 1,527 or 3.40 percent last week in the domestic market, while on the MCX it surged Rs 1,825 or 4.08 percent in the same period.
The rate of 10 gram 22-carat gold in Mumbai was Rs 42,635 plus 3 percent GST, while 24-carat 10 gram was Rs 46,545 plus GST. The 18-carat gold quoted at Rs 34,909 plus GST in the retail market.
Bullion prices are supported by rupee depreciation against the dollar. Surging covid cases in India and RBI’s accommodative stance has pulled the Indian rupee to the lowest level since August 2020.
Speculators raised their bullish position in COMEX gold and silver contracts by 26,943 contracts to 77,406 and by 3,648 contracts to 24,884 respectively in the week to April 6, US CFTC data showed.
US Federal Reserve Chief Jerome Powell said that the US economy is at “inflection point” with expectations that growth and hiring will pick up speed in the months ahead, but also risks if a hasty reopening leads to a continued increase in coronavirus cases.
Market participants this week will keep an eye on the inflation data expected from major economies.
The US dollar trades slightly weaker at 92.09, or down 0.07 percent against a basket of six rival currencies after dropping 0.9 percent last week.
The US 10 year treasury yields trade firm at 1.66 percent, up 3 basis points in the evening session.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund remained unchanged at 1026.07 tonnes, the lowest since April 2020.
Spot gold fell by $ 4.27 to $ 1,739.67 an ounce at 1257 GMT in London trading.
MCX Bulldesk increased 16 points or 0.11 percent, at 14,572 at 18:28. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“MCX gold finished the week on a high note although on Friday the bullion dropped by half a percent on account of profit booking, still closed the week with nearly 2.6% gains. MCX Silver too witnessed an almost same trend as it finished with slightly less than 3% appreciation.
“Major reasons behind the rally in the week gone by were the dollar index which drifted lower by nearly 1%, weaker bond yields and also Feds dovish minutes. The bearish trend in industrial metals dragged down silver. In the absence of any major economic data, we expect bullion to fall further amid a rebound in the US dollar”, Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers.
“COMEX gold trades marginally lower near $ 1742/oz. Gold retreated after failing to sustain above $ 1750/oz level. Weighing on the gold price is a pause in the US dollar’s recent slide as a bigger than expected rise in US producer price rekindled inflation and interest rate hike expectations. ETF outflows also show continuing exodus by investors.
“However, supporting price is rising virus cases and Fed’s insistence on continuing with accommodative monetary policy. Gold has come off recent highs and may see some extended losses provided the US dollar index recovers”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 69.28 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices jumped by Rs 247 to Rs 67,177 per kg from its closing on April 9.
In the futures market, the gold rate touched an intraday high of Rs 46,777 and an intraday low of Rs 46,508 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 gained Rs 37, or 0.08 percent, at Rs 46,630 per 10 gram in evening trade on a business turnover of 11,815 lots. The same for August rose Rs 60, or 0.13 percent, at Rs 46,840 on a business turnover of 1,645 lots.
The value of June and August’s contracts traded so far is Rs 2,549.15 crore and Rs 75.89 crore, respectively.
Similarly, Gold Mini contract for May edged up Rs 31, or 0.07 percent at Rs 46,375 on a business turnover of 18,683 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 in a marginal sideways and bearish trend. Prices are sustaining below 50-SMA after testing $ 1,755-1,760 levels in the previous week. On the domestic front, we may expect prices to continue to trade in a choppy manner and resist below Rs 47,000 levels during the evening session.
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