Gold prices ease to Rs 51,341/10 gm on stronger dollar, silver plunges Rs 1,764/kg

Gold prices fell Rs 279 to Rs 51,341 per 10 gram in the Mumbai market on rupee appreciation against the dollar and weak global cues. The precious metal prices slipped as the dollar rebounded on safe-haven buying ahead of Federal Reserve Chairman Jerome Powell’s speech later this week.

The yellow metal had gained Rs 179, or 0.35 percent, last week in the domestic retail market.

The rate of 10 gram 18, 22 and 24-carat gold in Mumbai was Rs 38,506, Rs 47,028 and Rs 51,341, respectively, plus 3 percent GST.

A fluctuating dollar has kept prices in a range so far, with uncertainty over the US stimulus package and concerns over an US economic recovery.

SPDR Gold holdings declined for third week to 1246.98 tonne on September 18.

MCX iCOMDEX Bullion Index slid 220.50 points, or 1.37 percent, to 15,922.91 at 17:31 hours. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal, said, “Gold prices erased earlier gains to trade lower due to an uptick in the dollar, while investors looked to speeches from Fed policymakers this week which could be responsible for some volatility in the market. The resurgence in COVID-19 infections across the world in recent months has forced authorities to gradually reimpose bans, including the mandatory use of masks in all closed public and private spaces. Many countries like Britain are also thinking of reimposing lockdown restrictions, which could increase the panic to another level in the market.”

Damani expects COMEX and domestic prices to hover around $1,915-1,955 per troy ounce and Rs 50,950-51,700 per 10 gm range, respectively.

"Choppiness in the equity market and dollar has led to mixed trade in gold. Supporting price is ETF inflows and increasing concerns about the virus spread, impasse over US fiscal stimulus and US-China tensions. Gold may remain lower for the day provided the Dollar Index holds on to its gains,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold-to-silver ratio currently stands at 80.04 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices declined Rs 1,764 to Rs 64,141 per kg from its closing on September 18.

In the futures market, gold touched an intraday high of Rs 51,650 and a low of Rs 50,804 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 slipped Rs 590, or 1.14 percent, at Rs 51,125 per 10 gram in evening trade on a business turnover of 8,395 lots. The same for December eased Rs 565, or 1.09 percent, at Rs 51,295 on a business turnover of 9,628 lots.

The value of the October and December contracts traded so far is Rs 3,687.66 crore and Rs 446.86 crore, respectively.

Similarly, Gold Mini contract for October edged lower Rs 539, or 1.04 percent, at Rs 51,225 on a business turnover of 15,073 lots.

At 12:13 (GMT), spot gold was down $20.02 at $1,930.50 an ounce in London trade.