Gold prices were steady at Rs 47,846 per 10 gram in the Mumbai retail market on rupee appreciation and weak global cues. The yellow metal traded in a narrow band amid volatility in the dollar, choppiness in the equity market and rising coronavirus cases caused by the Delta variant.
The price of 10 gram 22-carat gold in Mumbai was Rs 43,827 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,846 plus GST. The 18-carat gold quoted at Rs 35,885 plus GST in the retail market.
The bullion prices were supported by rising worries over the fast-spreading of the Delta variant virus in some parts of the world and slower pace of economic recovery.
The CFTC data showed that money managers increased their net long positions by 20488 lots in last week.
The traders and investors weighed US FOMC minutes as few FED officials advocated to keep the bond-buying program unchanged till significant economic recovery.
The US dollar traded firm at 92.41, up 0.32 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 1,040.19 tonnes. The ETF has a market value of $ 60.39 billion.
Spot gold corrected by $ 7.70 to $ 1,800.79 an ounce at 1207 GMT in London trading.
MCX Bulldesk decreased 63 points or 0.45 percent, at 14,678 at 17:38. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices inched higher trading steady above the $ 1800 mark, amidst the persisting concerns around COVID-19 and its variants. Along with Covid-19, an upsurge in new coronavirus variants like Delta and poor access to vaccines in developing countries threaten the global economic recovery, finance ministers of the world’s 20 largest economies warned last weekend. Few fed officials had their speech scheduled last week, where they blamed shortage in material and difficulty in hiring as a hurdle for the growth of U.S. economy,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
“Speculators raised their net long positions in COMEX gold and silver in the week ended July 6, according to CFTC. The market will keep a close eye on U.S. consumer price index data scheduled tomorrow and Powell’s appearance before Congress later this week to get cues on policy tightening by the central bank”, he said
The Broader range on COMEX could be between $ 1786- 1820 and on the domestic front, prices could hover in the range of Rs 47,550- 48,150.
“COMEX gold trades marginally lower near $ 1,804/oz. Gold eased as US bond yields came off the lows amid stability in equity markets. Also weighing on price is weaker investor interest and Fed’s monetary tightening expectations. However, supporting price is rising virus concerns, US-China tensions and inflationary concerns. Gold may remain choppy amid lack of fresh cues however increasing challenges may improve safe-haven appeal,” Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
The gold/silver ratio currently stands at 69.76 to 1, which means 69.76 ounces of silver is required to buy an ounce of gold.
Silver prices dropped by Rs 204 to Rs 68,585 per kg against its closing price on July 9.
In the futures market, the gold rate touched an intraday high of Rs 47,820 and an intraday low of Rs 47,581 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 44,501 and a high of Rs 49,721.
Gold futures for August delivery slipped Rs 211, or 0.44 percent, to Rs 47,712 per 10 gram in evening trade on a business turnover of 8,670 lots. The same for October fell Rs 176, or 0.37 percent, to Rs 47,982 on a business turnover of 6,106 lots.
The value of August and October’s contracts traded so far is Rs 2,155.52 crore and Rs 250.48 crore, respectively.
Similarly, Gold Mini contract for August edged lower by Rs 193, or 0.40 percent at Rs 47,705 on a business turnover of 13,807 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices traded lower on the frim dollar index and mixed global cues. Gold prices kept a lower trading range as traders and investors are waiting for key US inflation data on Tuesday and FED chairman testimony during the week.
Earlier, Gold prices reported a third weekly gain with a fall in US treasury yields and Delta virus spreading. We expect gold prices to trade sideways to down for the day with COMEX gold support at $ 1790 and resistance at $ 1820 per ounce. MCX Gold August support lies at Rs. 47500 and resistance at Rs.48000 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading with marginal changes above the $ 1,800 level after a bullish breakout during the previous week. We may expect a rise from here in the coming sessions. On the domestic front, MCX Gold August gave a gap down opening but is trading with marginal sideways and negative bias. The market has been trading in a choppy manner where prices are sustaining above major support of Rs 47,650-47,550 level. We may expect a rise during the evening hours where Rs 48,000 levels could be tested.
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