Gold prices gain Rs 451 on fiscal stimulus hopes, silver up Rs 900

Gold prices surged for the second successive day by Rs 451 to Rs 46,536 per 10 gram in the Mumbai bullion market on hopes of further monetary and fiscal stimulus from major economies to minimise the damage caused by the coronavirus pandemic.

Major gold-trading centres have remained shut in the country due to the lockdown announced to prevent the spread of coronavirus.

The rate of 10 gram 22-carat gold in Mumbai was Rs 42,627 plus 3 percent GST, while 24-carat 10 gram was Rs 46,536 plus GST. The 18-carat gold quoted at Rs 34,902 plus GST in the retail market.

Gold continued its positive momentum on April 23 after rising in the previous day's session. At the time of writing this, COMEX Gold was up by 0.56 percent, trading at $1748/Oz.

"Stability in crude oil prices and the expectation of more stimulus from global central bankers are providing the required support. ETF inflows have steadily witnessed additions," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

Technically, support in COMEX Gold June contract is at $1732/Oz and resistance is pegged at $1758/Oz. For MCX Gold June contract support is at Rs.46150 and resistance is at Rs.46850. "Positive momentum might continue in today’s evening session provided the mentioned technical support holds," Rao said.

According to Navneet Damani, Vice President, Motilal Oswal, gold prices edged higher in the yesterday's session on hopes for more fiscal and monetary stimulus measures amid massive economic damage due to stay-at-home and business shutdown orders around the world to limit the spread of the novel coronavirus.

The US House of Representatives may pass a nearly $500 billion coronavirus relief bill. Market participants will keep an eye on the PMI numbers expected from major economies in order to gauge the impact of COVID-19.

The broader trend on Comex could be $1,705-1,750 and on the domestic front, prices could hover in the range of Rs 46,170- 46,950, said Damani.

The gold/silver ratio currently stands at 109.49 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices gained Rs 900 to Rs 42,500 per kg from its closing on April 22.

In the futures market, gold rate touched an intraday high of Rs 46,716 and an intraday low of Rs 46,166 on MCX. For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,327.

Gold futures for delivery in June gained Rs 323, or 0.7 percent on the MCX trading at Rs 46,490 per 10 gram in evening trade in a business turnover of 16,269 lots. Gold contracts for August delivery rose Rs 344, or 0.74 percent, at Rs 46,644 per 10 gram in a business turnover of 3,616 lots.

The value of the June contract traded so far is Rs 2,723.11 crore and August contract saw the value of Rs 210.30 crore.

Similarly, Gold Mini contract for May jumped Rs 286, or 0.62 percent at Rs 46,475 in a business turnover of 12,077 lots.

MCX Gold is expected to trade positively with support at Rs 46,300 and intermediate support at Rs 46,500 level, according to Motilal Oswal. The brokerage firm advised its clients to buy on dips targeting higher resistance at Rs 46,900-47,200 levels.

The firm also said spot gold is expected to trade in a range of $1,705-1,755 with positive bias.

At 12:45 pm (GMT), spot gold was up by $13.21 at $1,726.88 an ounce in London trading.