Gold falls for second successive day to Rs 48,654/10 gm; silver eases


Gold prices dropped for the second straight day by Rs 156 to Rs 48,654 per 10 gram at Mumbai retail market on a stronger dollar and subdued global trend. The upbeat US GDP data, rally in global equity markets and appreciation in rupee also put downward pressure on the precious metal.

The rate of 10 gram 22-carat gold in Mumbai was Rs 44,567 plus 3 percent GST, while 24-carat 10 gram was Rs 48,654 plus GST. The 18-carat gold quoted at Rs 36,491 plus GST in the retail market.

Market players will take further cues from the US inflation report to be released later in the day.

The US dollar traded higher at 90.39, up 0.49 percent against a basket of six rival currencies. 

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund were unchanged at 1,044.08 tonnes. 

Spot gold was modestly down by $ 2.65 to $ 1,893.85 an ounce at 1255 GMT in London trading.

MCX Bulldesk tanked 89 points or 0.58 percent, at 15,155 at 18:26. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“COMEX gold trades mixed near $ 1893/oz. Stability in the equity market and the US dollar has made gold vulnerable to profit-taking. ETF investors have also moved to the sidelines. However, supporting price is virus concerns, loose monetary policy stance of major central banks and mixed economic data from major economies. Gold may witness choppy trade however bias may be on the downside if the US dollar can recover”, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 69.01 to 1, which means 69.01 ounces of silver is required to buy an ounce of gold.

Silver prices eased by Rs 150 to Rs 70,500 per kg against its closing price on May 27.

In the futures market, the gold rate touched an intraday high of Rs 48,512 and an intraday low of Rs 48,250 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 116, or 0.24 percent, to Rs 48,465 per 10 gram in evening trade on a business turnover of 1,570 lots. The same for August fell Rs 116, or 0.24 percent, to Rs 49,050 on a business turnover of 11,952 lots.

The value of June and August’s contracts traded so far is Rs 1,780.22 crore and Rs 1,712.24 crore, respectively.

Similarly, Gold Mini contract for June declined by Rs 113, or 0.23 percent at Rs 48,448 on a business turnover of 6,607 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices witnessed a decline after positive US economic data showing strong economic growth. The traders and investors are awaiting key indicating data of US inflation in the evening session which has pressured gold prices to trade weak. 

We expect gold prices to trade sideways to down for the day with COMEX gold support at $ 1876 and resistance at $ 1910 per ounce. MCX Gold June support lies at Rs. 48100 and resistance at Rs. 48700 per 10 gram.

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

Technically, International Gold is trading with negative bias. The psychological levels of $ 1,900 were breached but the market was unable to sustain above them. On the MCX, prices declined more than 700 points in the previous two sessions and may continue the same momentum today as well. On the upside Rs 48,500 levels may act as resistance for the prices.

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