Gold prices flat at Rs 47,757/10 gram, Axis Securities sees price at Rs 53,000 level by year-end; Silver drops


Gold prices were steady at Rs 47,757 per 10 gram in the Mumbai retail market on a stronger rupee and positive global trend. The precious metal ended the second successive week with gains and rose Rs 273, or 0.58 in the domestic market.

The rate of 10 gram 22-carat gold in Mumbai was Rs 43,745 plus 3 percent GST, while 24-carat 10 gram was Rs 47,757 plus GST. The 18-carat gold quoted at Rs 35,818 plus GST in the retail market.

“Akshaya Tritiya is celebrated under the shadow of COVID pandemic for the second year in a row. Buying and gifting gold is considered auspicious on this day and it has huge cultural significance. Amid lockdowns in several parts of the country and an uneasy air of fear that hangs, consumer sentiment remains muted and offline sales have been severely impacted, particularly in major cities and gold consuming states like Kerala, Andhra Pradesh, Maharashtra and West Bengal”, said Somasundaram PR, Managing Director, India, World Gold Council.

“Many organised jewellers have, however, adopted digital and omnichannel strategies to reach out to their consumers, learning from the lockdown experience of 2020. Coupled with decent pre-bookings before lockdown, these steps could redeem the festival from being a complete washout and present a slightly improved picture than last year”, he added.

Sunilkumar Katke, Head – Commodity and Currency, Axis Securities said, “Recently, Gold prices have bounced back from March 2021 lows, close to Rs 44000 per 10 grams and are trading at Rs 47600 per 10 grams owing to correcting dollar and treasury yields. Concerns over inflation will remain the driving factor along with the safe-haven appeal on account of uncertainty linked with COVID hit economy. We believe the geopolitical tensions in the Middle East will also support the prices in the short term.”

“We recommend a Buy around Rs 47,500 levels targeting Rs 49,000 per 10 grams by the month-end and Rs 53,000 as a target by the year-end, making it a decent entry-level on this auspicious occasion of Akshaya Tritiya”, Katke added.

“Considering the very low base of 2020, this year’s Akshaya Tritiya will naturally be better, but the numbers will not be comparable to the pre-COVID situation of 2019 or earlier”, Ramesh Kalyanaraman, Executive Director – Kalyan Jewellers.

The US dollar depreciates 0.32 percent to 90.42 against a basket of six rival currencies. The fall in the dollar index makes gold cheaper for holders of other currencies.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell 0.87 tonne to 1,024.28 tonnes. 

Spot gold jumped by $ 10.91 to $ 1,837.51 an ounce at 12:24 GMT in London trading.

“Gold edged higher as the US Dollar pulled back from one week high after the US Fed downplayed an imminent rise in interest rates despite a sharp rise in inflation. Market participants today will keep an eye on the U.S. industrial production and Retail sales data scheduled later in the day” said Navneet Damani, Vice President, Motilal Oswal Financial Services.

“Gold stabilized as US bond yields eased back after testing the highest level in more than a month. Also supporting price is increased tensions between Israel and Gaza. However, weighing on price is ETF outflows, concerns about consumer demand in India and increasing debate that inflation pressure may cause monetary tightening. Gold may remain choppy reflecting volatility in the US dollar however we expect buying interest to emerge at lower levels as Fed is likely to maintain a dovish stance”, Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 67.87 to 1, which means 67.87 ounces of silver is required to buy an ounce of gold.

Silver prices tumbled by Rs 588 to Rs 70,360 per kg against its closing price on May 12.

In the futures market, the gold rate touched an intraday high of Rs 47,650 and an intraday low of Rs 47,337 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 rose Rs 184, or 0.39 percent, to Rs 47,622 per 10 gram in evening trade on a business turnover of 7,306 lots. The same for August surged Rs 145, or 0.30 percent, at Rs 48,090 on a business turnover of 6,979 lots.

The value of June and August’s contracts traded so far is Rs 1,532.81 crore and Rs 411.39 crore, respectively.

Similarly, Gold Mini contract for June gained by Rs 178, or 0.38 percent at Rs 47,630 on a business turnover of 14,784 lots.

Trading Strategy

We expect gold prices to trade sideways to up for the day with COMEX gold support at $ 1820 and resistance at $ 1850 per ounce. MCX Gold June support lies at Rs 47,200 and resistance at Rs 47,800 per 10 gram.

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