Gold prices climb on safe-haven appeal, surging coronavirus cases; gold-silver ratio jumps above 76


Gold prices jumped on August 19 as investors seek refuge in the safe-haven asset amid rising Delta variant cases of coronavirus and FOMC’s meeting minutes hinting stimulus easing later in the year. However, the yellow metal upside was capped by the strong dollar.

The commodity market was shut in the first half of the session on account of the Muharram holiday.

The retail gold price settled at Rs 47,276 per 10 gram in the Mumbai retail market yesterday and it is closed for trading today. The rate for 18, 22 and 24 carat gold were as Rs 35,457, Rs 43,305 and Rs 47,276 plus 3 percent GST.

The bullion metal traded in the green after a gap-up start in the evening session.

The precious metal has been trading lower than 50, 100, and 200 days’ moving averages but higher than the 5 and 20 days’ moving averages on the daily chart. The momentum indicator Relative Strength Index (RSI) is at 50.20 which indicates sideways momentum in the prices.

The US dollar index traded higher at 93.35, up 0.23 percent, the highest in 2021 against the major cross. While the Benchmark 10-year US T-bond yield dipped 4 basis points to 1.22 percent which decreases the opportunity cost of holding the bullion metal.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped by 2.04 tonnes to 1,015.10 tonnes. The ETF has a market value of $ 58.19 billion.

Spot gold slightly eased by $ 1.12 to $ 1,786.93 an ounce at 1210 GMT in London trading.

MCX Bulldesk increased by 29 points or 0.21 percent, at 14,160 at 17:40. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

The spot gold/silver ratio currently stands at 76.51 to 1 indicating that gold has outperformed silver. The Mint ratio is trading at its highest since December 16, 2020.

In the futures market, the gold rate touched an intraday high of Rs 47,850 and an intraday low of Rs 47,211 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 rose Rs 191, or 0.41 percent, at Rs 47,323 per 10 gram in evening trade on a business turnover of 12,202 lots. The same for December gained Rs 156, or 0.33 percent, at Rs 47,481 on a business turnover of 1,843 lots.

The value of the October and December’s contracts traded so far is Rs 314.94 crore and Rs 5.70 crore, respectively.

Similarly, Gold Mini contract for September edged higher Rs 138, or 0.29 percent at Rs 47,207 on a business turnover of 12,996 lots.

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