Gold rises by Rs 307 to Rs 45,864, silver up Rs 1,150

Gold prices rose Rs 307 to Rs 45,864 per 10 gram in the Mumbai bullion market on May 6 on a weak rupee.

The rate of 10 gram 22-carat gold in Mumbai was Rs 42,011 plus 3 percent GST, while 24-carat 10 gram was Rs 45,864 plus GST. The 18-carat gold quoted at Rs 34,398 plus GST in the retail market.

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

Comex gold was trading marginally lower near $1,706 per oz after a 0.2 percent decline a day earlier.

In the last few sessions, gold has been trading in the $1,700- $1,738 range, as mixed triggers kept traders on sidelines.

At the lower levels, gold is getting support from US-China tensions, global growth worries and ETF inflows, whereas a stronger US dollar and easing of virus restrictions is capping the gains, said Ravindra Rao, VP-Head Commodity Research at Kotak Securities.

A clear short term direction might be seen only on a break of either $1,696 or $1,738, he said.

According to Navneet Damani, Vice President, Motilal Oswal, Gold prices inched lower as equities rose on upbeat risk sentiment stemming from gradual reopening of many economies. A firmer dollar also weighed on prices.

Germany's highest court gave the ECB three months to justify bond purchases under its flagship stimulus programme or lose the Bundesbank as a participant, raising questions about the scheme and the euro's future.

Market participants will keep an eye on service PMI number expected from major economies and US private jobs figure will also be on the watch. Better-than-expected number may put pressure on metal prices.

The broader trend on Comex could be $1,680-1,725 and on the domestic front, prices could hover in the Rs 45,490-46,100 range.

The gold/silver ratio currently stands at 109.85 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices jumped Rs 1,150 to Rs 41,750 per kg from its closing on May 5.

In the futures market, gold touched an intraday high of Rs 45,848 and an intraday low of Rs 45,641 on MCX. For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,327.

Gold for June delivery was up Rs 6, or 0.01 percent, on the MCX, trading at Rs 45,757 per 10 gram in the evening in a business turnover of 13,882 lots.

Gold contracts for August delivery gained Rs 13, or 0.03 percent, at Rs 45,999 per 10 gram in a business turnover of 6,680 lots.

The value of the June contract traded, so far, is Rs 1,700.02 crore and August contract saw the value of Rs 86.40 crore.

Similarly, Gold Mini contract for June slipped Rs 5, or 0.01 percent at Rs 45,750 in a business turnover of 9,906 lots.

MCX gold is expected to trade positive with support at Rs 45,500 and intermediate support at Rs 45,650, according to Motilal Oswal. The brokerage firm advised its clients to buy on dip targeting higher resistance at Rs 45,900-46,050 levels.

The broking said spot gold will trade in the $1,685-1,720 range.