Gold prices eased by Rs 91 to Rs 47,975 for 10 grams in the Mumbai bullion market on rupee appreciation and weak global trends. The yellow metal was pressured downward by a firm dollar and rising 10 years Treasury yields.
The price of 10 gram 22-carat gold in Mumbai was Rs 43,945 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,975 plus GST. The price of 18-carat gold was quoted at Rs 35,981 plus GST in the retail market.
“Gold prices traded under pressure on a stronger dollar and mixed global cues. The precious metals may keep a steady trading range ahead of the US FOMC meeting next week. ECB President Christine Lagarde acknowledged higher inflation, she pushed back against market bets that inflationary pressures would trigger an interest rate hike as soon as 2022”, said Tapan Patel- Senior Analyst (Commodities), HDFC securities.
Patel expects gold prices to trade sideways to down with COMEX spot gold resistance at $ 1,810 and support at $ 1,785 per ounce. MCX Gold December support lies at Rs 47,700 and resistance at Rs 48,200 per 10 gram.
The US economy expanded at a slower pace of 2 percent in the third quarter of 2021 as per advance estimates, due to disruptions in supply chains and deceleration in consumer spending.
Investors are expected to have a keen eye on the upcoming US Federal Reserve meet scheduled in the first week of November 2021.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 0.87 tonnes to 982.14 tonnes. The ETF has a market value of $ 56.93 billion.
The dollar index marginally rose to 93.55, up 0.25 percent against a basket of six rival currencies.
Spot gold dropped by $ 5.51 at $ 1,793.42 ounce at 1201 GMT in London trading.
MCX Bulldek dipped by 54 points or 0.37 percent to 14,356 at 5.32 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
The gold-silver ratio stands at 74.37 to 1, which means 74.37 ounces of silver is required to buy an ounce of gold.
Silver prices declined by Rs 236 to Rs 64,508 a kg against its closing price on October 28.
In the futures market, the gold price touched an intraday high of Rs 47,944 and an intraday low of Rs 47,750 on 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 slipped Rs 201, or 0.42 percent, at Rs 47,760 in the evening trade on a business turnover of 10,044 lots. The same for February slumped by Rs 152, or 0.32 percent, to Rs 47,870 on a business turnover of 4,482 lots.
The value of December and February contracts traded is Rs 1,715.99 crore and Rs 142.88 crore, respectively.
The Gold Mini contract for November edged lower by Rs 246, or 0.51 percent, at Rs 47,721 on a business turnover of 16,286 lots.
Trading Strategy
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, international gold is trading in a choppy manner near $ 1,800 levels. The market has been resisting below $ 1,815-1,810 levels. On the domestic front, MCX October Gold is trading in a sideways range of Rs 47,760-47,899. In the previous session, prices tested the resistance zone of Rs 48,200-48,300 and fell more than 400 points from there. We may expect the market to trade with bearish bias in the evening.
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