Gold prices rose by Rs 499 to touch Rs 51,893 per 10 gram in the Mumbai market on rupee depreciation and strong global cues. The precious metal prices were trading firm on dollar weakness ahead of the Fed policy statement tomorrow and global economic growth concerns.

The rate of 10 gram 22-carat gold in Mumbai was Rs 47,534 plus 3 percent GST, while 24-carat 10 gram was Rs 51,893 plus GST. The 18-carat gold quoted at Rs 38,920 plus GST in the retail market.

The US dollar index, measured against a basket of six currencies, was trading down 0.24 percent at 92.83. The expectation is that the Fed will maintain a dovish stance and that could continue to keep the greenback weighed down.

The uncertainty over BREXIT withdrawal, US-China tensions and rising coronavirus cases have kept risk premium high in the gold prices.

MCX iCOMDEX Bullion Index surged 141.50 points, or 0.87 percent, at 16,341.02 at 17:32. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal, said, “Gold extended its gains following weakness in the dollar against its major crosses and volatility in the next couple of sessions is expected to remain high ahead of the important Fed policy statement that is scheduled for release this week. Uncertainty on the Brexit front is also likely to keep gold prices supported at lower levels. Yesterday, British PM Boris Johnson won the so-called second reading vote on the bill that the EU says would collapse trade talks and propel the United Kingdom towards a messy Brexit. Apart from Fed, Bank of England will be releasing its policy statement and is likely to have an impact on the overall market.”

For today we expect gold on MCX to quote in the range of Rs 51,600 and Rs 52,550. On COMEX the expected range is $1,930 and $1,990.

“COMEX gold trades higher near $1974/oz a 0.57 percent gain from yesterday’s close. Although gold is trading higher broadly it continues to remain stuck in a range of $1900-2000/oz. Mixed activity in ETF flows also shows a lack of direction in the market. Gold may remain sideways to positive amid lack of clear cues; however general bias may be on the upside owing to increasing challenges to global economy and hopes of dovish stance of major central banks,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 77.73 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices rose Rs 1,535 to Rs 66,758 per kg from its closing on September 14.

In the futures market, gold rate touched an intraday high of Rs 52,182 and an intraday low of Rs 51,765 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,596 and a high of Rs 56,191.

Gold futures for October delivery gained Rs 442, or 0.86 percent, at Rs 52,129 per 10 gram in evening trade on a business turnover of 11,492 lots. The same for December edged higher Rs 439, or 0.85 percent, at Rs 52,298 on a business turnover of 7,372 lots.

The value of the October and December contracts traded so far is Rs 2,855.76 crore and Rs 322.74 crore, respectively.

Similarly, Gold Mini contract for October increased Rs 438, or 0.85 percent at Rs 52,197 on a business turnover of 15,845 lots.

MCX Gold price is trading under a rising trend line channel, price is expected to trade positively. Sustaining above Rs 52,000 would push price higher towards Rs 52,200-52,400 levels in intraday, according to Axis Securities.

The momentum indicator Relative Strength Index (RSI) is trading at 71 indicating bullishness in prices.

At 1213 (GMT), spot gold was up $13.43 at $1,970.12 an ounce in London trading.