Gold prices jump above Rs 47,500/10 gm on firm global trend, festive demand; Silver costlier by Rs 1,386 a kg


Gold prices rose by Rs 164 to Rs 47,548 per 10 gram in the Mumbai bullion market tracking firm global trend and festive demand. The precious metal upside was capped by sharp appreciation in rupee, firm dollar and rising Treasury yields.

The price of 10 gram, 22-carat gold in Mumbai was Rs 43,554 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,548 plus GST. The 18-carat gold quoted at Rs 35,661 plus GST in the retail market.

Gems and Jewellery Export Promotion Council (GJEPC) stated that India’s gold imports are expected to grow further in the coming months on account of peak demand due to festive and wedding seasons, news agency PTI reported.

“The dollar index rebounded from an intraday low point as Fed Governor Christopher Waller said, if inflation keeps rising at its current pace in coming months, policymakers may need to adopt “a more aggressive policy response” next year. Today, MCX Gold December futures may decline to Rs 47,100 per 10 gram, as the US dollar is expected to rise after Waller said that the central bank should begin tapering its monthly purchases of $ 120 billion in Treasury and mortgage-related assets next month, affirming market expectations for a reduction in programs that were launched during the height of the pandemic but were viewed as no longer needed,” said Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers. 

The economic calendar is muted for the day on the U.S. front, although comments from the Fed officials and preliminary manufacturing and Service PMI data are in focus for the week.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund were unchanged for the second day at 980.10 tonnes, the lowest level in 2021. The ETF has a market value of $ 56.06 billion.

The US dollar index trades marginally firm at 93.82, up 0.11 percent against a basket of six rival currencies. 

Spot gold advanced by $ 14.71 to $ 1,783.89 an ounce at 1207 GMT in London trading.

MCX Bulldek increased by 89 points or 0.63 percent to 14,290 at 17:38. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

“Gold continues to trade steady after rising more than 1% in the previous session, amidst the positive US economic data and steady Dollar. The overall safe-haven appeal did feel some pressure as an uptick was witnessed in the US Treasury yields and US equities. Wall Street rose, on the back of upbeat results from Johnson & Johnson and insurer Travelers; while diminishing the appeal of gold, U.S. benchmark 10-year Treasury yields hit their highest level since early June at 1.63 levels,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.

Market participants are increasingly expecting the Fed to start tapering its asset purchases soon, as the earnings season has been encouraging so far and recent data showed a solid increase in U.S. consumer prices. Market expectations for future interest rates do not square with the ECB’s guidance for no hike until inflation is seen stably at 2%, its chief economist said.

The broader range on COMEX could be between $ 1,755- 1,790 and on the domestic front, prices could hover in the range of Rs 47,050- 47,650.

The gold-silver ratio currently stands at 73.72 to 1, which means 73.72 ounces of silver is required to buy an ounce of gold.

Silver prices surged by Rs 1,386 to Rs 64,496 per kg against its closing price on October 18.

In the futures market, gold price touched an intraday high of Rs 47,528 and an intraday low of Rs 47,320 on the Multi-Commodity Exchange (MCX). For the December series, the yellow metal touched a low of Rs 45,705 and a high of Rs 48,899.

Gold futures for December delivery gained by Rs 239, or 0.51 percent, at Rs 47,519 per 10 gram in evening trade on a business turnover of 11,682 lots. The same for February soared by Rs 265, or 0.56 percent, to Rs 47,651 on a business turnover of 2,576 lots.

The value of December and February contracts traded so far is Rs 1,731.78 crore and Rs 99.86 crore, respectively.

Similarly, the Gold Mini contract for November ascends Rs 187, or 0.40 percent at Rs 47,383 on a business turnover of 13,099 lots.

Trading Strategy

Tapan Patel- Senior Analyst (Commodities), HDFC securities

Gold prices kept the upper trading range for the day limiting gains with a rise in US bond yields. The 10 year US bond yields rose to 1.65% ahead of FD speculation on sooner Fed tapering. Bullion prices are supported by global inflation worries about power shortages. 

We expect gold prices to trade sideways to up with COMEX spot gold resistance at $ 1,800 and support at $ 1,760 per ounce. MCX Gold December support lies at Rs 47,100 and resistance at Rs 47,600 per 10 gram.