Gold prices rise to Rs 48,672/10 gm on safe-haven billing, ETF inflows; silver falls


Gold prices modestly gained Rs 119 to Rs 48,672 per 10 gram at Mumbai retail market on a weak rupee and subdued global cues. The precious metal was supported by a pullback in dollar, Treasury yields and selloff in cryptocurrencies boosted safe-haven appeal.

The rate of 10 gram 22-carat gold in Mumbai was Rs 44,584 plus 3 percent GST, while 24-carat 10 gram was Rs 48,672 plus GST. The 18-carat gold quoted at Rs 36,504 plus GST in the retail market.

Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd said, “Soaring commodity prices around the globe ignited potential inflation worries which shifted the investors towards Gold, an inflation hedge. However, gold gave up some of its gains as the minutes of the US Federal Reserve official’s policy meet conducted on 27th – 28th April’21 stated that several FED officials agreed to consider a shift in the policy stance given a strong and persistent recovery in the world’s largest economy.”

The economic calendar is muted for the day, although the focus will remain on the US consumer confidence and GDP data scheduled later this week.

The US dollar traded below 90 marks at 89.88, down 0.13 percent against a basket of six rival currencies. 

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund rose by 5.83 tonnes to 1,042.92 tonnes. 

Spot gold was marginally higher by $ 2.63 to $ 1,883.84 an ounce at 12:23 GMT in London trading.

MCX Bulldesk climbed 82 points or 0.54 percent, at 15,212 at 17:53. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold steadied near the highest level in more than four months amid weaker dollar and pullback in US yields showing the investors increased optimism on the precious metal. The dollar stood near its lowest levels in three months; whereas US 10 year yields were hovering near a week low,” Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services. 

“The Fed has kept their focus on attaining better job data, although now few fed officials have begun lowering expectations for May jobs growth in the US as business hiring plans continue to outrun the supply of people able or willing to work,” he said. 

The broader range on COMEX could be between $ 1,865-1,900 and on the domestic front, prices could hover in the range of Rs 48,400- 48,900.

The gold/silver ratio currently stands at 68.47 to 1, which means 68.47 ounces of silver is required to buy an ounce of gold.

Silver prices fell by Rs 170 to Rs 71,075 per kg against its closing price on May 21.

In the futures market, the gold rate touched an intraday high of Rs 48,622 and an intraday low of Rs 48,368 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 195, or 0.40 percent, to Rs 48,599 per 10 gram in evening trade on a business turnover of 5,642 lots. The same for August jumped Rs 193, or 0.39 percent, to Rs 49,082 on a business turnover of 9,149 lots.

The value of June and August’s contracts traded so far is Rs 1,052.97 crore and Rs 457.37 crore, respectively.

Similarly, Gold Mini contract for June rose by Rs 205, or 0.42 percent at Rs 48,573 on a business turnover of 11,930 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices continued upside after gaining for three consecutive weeks. Gold prices traded near four-month highs on the weaker dollar while sell-off in cryptocurrencies also boosted buying in safe-haven asset. Traders and investors are betting against higher inflation worries which may support gold prices to trade up.

We expect gold prices to trade sideways to up for the day with COMEX gold support at $ 1,860 and resistance at $ 1,900 per ounce. MCX Gold June support lies at Rs 48,200 and resistance at Rs 48,800 per 10 gram.

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

Technically, International Gold is trading with marginal sideways and positive bias. It is trading below $ 1,900 levels which may be breached in the coming days. On the MCX, prices are sustaining above 50-SMA and we may expect them to rise during the evening session and trade near Rs 48,800 levels.

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