Gold prices rose marginally to Rs 46,900 per 10 gram in the Mumbai retail market on May 3 on a firm global trend, but the upside was capped by a stronger rupee. The yellow metal traded firm on rising coronavirus cases weak dollar which boosted safe-haven billing. Market participants also awaited ahead of a series of economic data scheduled this week.
The bullion metal dropped Rs 1,015 or 2.12 percent last week in the domestic market on sharp appreciation in rupee and better than expected US economic data.
The rate of 10 gram 22-carat gold in Mumbai was Rs 42,960 plus 3 percent GST, while 24-carat 10 gram was Rs 46,900 plus GST. The 18-carat gold quoted at Rs 35,175 plus GST in the retail market.
Jigar Trivedi, Research Analyst- Commodities Fundamental at Anand Rathi Shares & Stock Brokers said, “MCX Gold finished April month with 4% positive returns but still it’s down by approx. 6% year to date. The dollar index fell by nearly 2% in the last month. Still Comex gold is struggling to cross $ 1,800 on a higher side.”
Trivedi expects the yellow metal to stay positive during the intraday. He suggests buying MCX Gold June at Rs 46,900 with a stop loss of Rs 46,800 and a target Rs 47,200.
US consumer spending rebounded in March amid a surge in income as households received additional COVID-19 pandemic relief money from the government.
China’s gold consumption soared 93.9 percent in the first three months from the same quarter a year earlier, the China Gold Association said on April 30.
The US dollar traded lower at 91.14 or down 0.14 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 1,017.04 tonnes. The holding fell from 1,037 tonnes as of March 30 to 1,017 tonnes as of April 30.
Spot gold jumped by $ 10.92 to $ 1,779.89 an ounce at 12:15 GMT in London trading.
MCX Bulldesk soared 112 points or 0.77 percent, to 14,724 at 17:46. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices edged higher, supported by a muted dollar ahead of a series of economic data scheduled this week. Fed Governor on one side is continuously downplaying inflation, on other hand, US Treasury Secretary Janet Yellen tamped down concerns that President Biden’s plans for infrastructure, jobs and families will cause inflation, saying the spending will be phased in over a decade”, said Navneet Damani, Vice President, Motilal Oswal.
“Market participants, during the current week, will keep an eye on Manufacturing and Service PMI data expected from major economies while non-farm payroll number will also be a highlight, which could trigger volatility in the market.”
The broader range on COMEX could be between $ 1758- $ 1800 and on the domestic front, prices could hover in the range of Rs 46,760- Rs 47,220.
“COMEX gold trades higher near $ 1777/oz. Gold inched up as the US dollar index paused after a sharp rally on Friday on back of hawkish comments from a Fed official and signs of rising inflation. Also supporting price is rising virus cases and mixed economic data from major economies. However, weighing on price is continuing ETF outflows and concerns about consumer demand in India. Gold may remain choppy as market players assess Fed’s monetary policy stance; however, the bias may be on the upside as central banks are likely to continue with dovish stance amid persisting virus risks”, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 68.49 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices climbed by Rs 675 to Rs 68,475 per kg from its closing on April 30.
In the futures market, the gold rate touched an intraday high of Rs 47,197 and an intraday low of Rs 46,921 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 338, or 0.72 percent, at Rs 47,075 per 10 gram in evening trade on a business turnover of 10,537 lots. The same for August jumped Rs 295, or 0.63 percent, at Rs 47,346 on a business turnover of 3,555 lots.
The value of June and August’s contracts traded so far is Rs 2,190.91 crore and Rs 122.59 crore, respectively.
Similarly, Gold Mini contract for June edged higher by Rs 368, or 0.79 percent at Rs 47,113 on a business turnover of 17,363 lots.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices pared some of the previous losses after falling for two weeks as weak dollar supported prices to trade firm. Traders and investors are awaiting more economic data this week after stronger US GDP numbers.
We expect gold prices to trade sideways to higher for the day with COMEX gold support at $ 1,760 and resistance at $ 1,790 per ounce. MCX Gold June support lies at Rs 46,700 and resistance is seen at Rs 47,200 per 10 gram.
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