Gold prices climbed for the fifth successive day by Rs 291 to Rs 46,993 per 10 gram in the Mumbai retail market on safe-haven appeal due to surging coronavirus cases globally and disappointing economic data. The yellow metal had tumbled Rs 945 or 1.98 percent last week in the domestic market.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,046 plus 3 percent GST, while 24-carat 10 gram stood at Rs 46,993 plus GST. The 18-carat gold is quoted at Rs 35,245 plus GST in the retail market.
The bullion prices witnessed a strong recovery in the last three trading days of the past week supported by a weaker dollar.
The CFTC data showed that money managers decreased their net long positions by 55,649 lots in last week.
The economic calendar is fairly light for the day, although FOMC meeting minutes, housing numbers and retail sales data from the US will be in focus this week.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 1.75 tonnes to 1,021.79 tonnes. The ETF has a market value of $ 58.26 billion.
Spot gold eased by $ 5.25 to $ 1,774.56 an ounce at 1215 GMT in London trading.
MCX Bulldesk declined by 36 points or 0.25 percent, at 14,091 at 17:46. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices eases off one week high, amidst an uptick in dollar although, a plunge in US consumer sentiment calmed investor concerns over an early tapering of the Federal Reserve’s asset purchases. The dollar and U.S. benchmark 10-year Treasury yields also weakened towards the end of last week, bolstering the appeal of gold. Amidst the fears of the potential economic impact of the fast-spreading Delta COVID-19 variant, the University of Michigan’s preliminary consumer sentiment index was at a decade low in early August. A cautious approach is still advised ahead of any comment from fed official regarding the U.S. economy or hint of any policy changes,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be between $ 1,765-1795 and on the domestic front, prices could hover in the range of Rs 46,800- 47,400.
The gold/silver ratio currently stands at 74.72 to 1, which means 74.72 ounces of silver is required to buy an ounce of gold.
Silver prices jumped by Rs 275 to Rs 62,887 per kg against its closing price on August 13.
In the futures market, the gold rate touched an intraday high of Rs 47,022 and an intraday low of Rs 46,816 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,662 and a high of Rs 50,040.
Gold futures for October delivery marginally dipped Rs 30, or 0.06 percent, to Rs 46,910 per 10 gram in evening trade on a business turnover of 12,828 lots. The same for December fell Rs 24, or 0.05 percent, to Rs 47,070 on a business turnover of 1,526 lots.
The value of October and December’s contracts traded so far is Rs 1,166.07 crore and Rs 48.04 crore, respectively.
Similarly, Gold Mini contract for September gained Rs 34, or 0.07 percent at Rs 46,920 on a business turnover of 14,813 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices pared some of the previous gains on stronger dollar on Monday. Earlier, prices traded higher on deteriorated US consumer sentiment and a fall in US treasury yields. The traders and investors are now awaiting Fed Chairman Jerome Powell’s comments at a virtual town hall meeting with educators and students on Tuesday.
We expect gold prices to trade sideways to down with COMEX spot gold resistance at $ 1750 and support at $ 1800 per ounce. MCX Gold October support lies at Rs 46600 and resistance at Rs.47100 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading with a negative bias above $ 1,770. Prices rallied more than 20 points in the previous session. On the domestic front, MCX Gold October is trading in a marginal sideways and negative bias since morning. In the previous session, the market rallied more than 500 points and we may witness bullish momentum to continue during the evening session where the price may sustain above Rs 47,000 levels.
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