Gold prices gain Rs 119 to Rs 47,496 per 10 gram, silver up Rs 170 per kg

Gold prices climbed Rs 119 to Rs 47,496 per 10 gram in the Mumbai bullion market on global cues. The precious metal edged higher after US Federal Reserve Chairman Jerome Powell in his testimony on June 17 reiterated slower economic growth due to the coronavirus pandemic.

The rate of a 10 gram 18-, 22- and 24-carat gold in Mumbai was Rs 35,622, Rs 43,506 and Rs 47,496 plus 3 percent GST.

Navneet Damani, Vice President, Motilal Oswal, said gold traded steady as investors remained concerned about a possible slowdown in global economic recovery due to the rise in new coronavirus cases in the US and China, but a strengthening dollar limited the metal's appeal.

Beijing cancelled scores of flights, shut schools and blocked off some neighbourhoods as it ramped up efforts to contain a coronavirus outbreak.

"The broader trend on the COMEX could be in the range of $1,710-1,745 per troy ounce and on the domestic front, prices could hover in the range of Rs 47,150-47,650," Damani said.

Ravindra Rao, VP- Head Commodity Research, Kotak Securities, said after trading 0.6 percent higher near $1749/oz in early trade, gold retreated and is trading near $1726/oz. "Gold has remained choppy within a trading range of $1750/oz to $1700/oz."

Equity markets too have turned choppy. Unprecedented global monetary as well as fiscal stimulus, is being offset by rising cases of infections globally, which in turn is denting prospects of reopening of economies. Experts told Moneycontrol that gold may continue to trade rangebound amid mixed cues.

The gold/silver ratio currently stands at 98.21 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices rose Rs 170 to Rs 48,360 per kg from its closing on June 18.

In the futures market, gold touched an intraday high of Rs 47,619 and an intraday low of Rs 47,110 on the Multi-Commodity Exchange (MCX). For the August series, the yellow metal touched a low of Rs 39,200 and a high of Rs 48,190.

Gold futures for August delivery slipped Rs 183, or 0.39 percent, at Rs 47,155 per 10 gram in evening trade on a business turnover of 13,860 lots. The same for October delivery eased Rs 183, or 0.39 percent, at Rs 47,315 on a business turnover of 5,617 lots.

The value of the August and October contracts traded so far is Rs 3,598.54 crore and Rs 68.41 crore, respectively.

Similarly, Gold Mini contract for July declined Rs 140, or 0.30 percent, at Rs 47,180 on a business turnover of 10,343 lots.

"Gold has seen a correction after forming multiple resistance near Rs 47,700 levels. It is expected to trade negatively. Sustaining below Rs 47,300 would push price lower towards Rs 47,000-46,800 levels in intraday trade," Axis Securities said in a recent note.

At 11:57 am (GMT), spot gold was down $4.11 at $1,722.88 an ounce in London trading.