Gold prices steady at Rs 51,350 per 10 gram; silver falls Rs 484 a kg

Gold prices were steady at Rs 51,350 per 10 gram in the Mumbai retail market on rupee appreciation and negative global cues. The precious metal declined in the international market, weighed down by firm dollar and stalemate over the US stimulus package before November 3 vote.

The bullion metal has gained over 25 percent in 2020 as it is considered as a hedge against inflation and currency debasement along with lower interest rates and an enormous amount of liquidity infusion by global central banks.

The rate of 10 gram 22-carat gold in Mumbai was Rs 47,037 plus 3 percent GST, while 24-carat 10 gram was Rs 51,350 plus GST. The 18-carat gold quoted at Rs 38,513 plus GST in the retail market.

The US dollar trades higher at 92.93 or up 0.36 percent against a basket of major currencies.

According to Fed Beige book released yesterday, economic activity in the US continued to increase across all districts, with the pace of growth considered as slight to modest in most districts.

Market players could look to cues from the jobless claims and existing home sales data tonight.

Spot gold was trading down $18.71 at $1,905.88 an ounce at 1230 GMT in London trading.

Gold holdings in SPDR ETF declined 0.6 tonnes to 1269.34 tonnes. 

MCX iCOMDEX Bullion Index fell 172.72 points, or 1.09 percent, at 15,624.56 at 18:02. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares and Stock Brokers said, “MCX gold having risen for three back-to-back days, witnessed a correction on Thursday. The dollar too has shown signs of recovery. All eyes are on the US government as the gap narrows on a relief stimulus package. Whenever there is positive news on US stimulus, the dollar is falling and that ends up being a small positive for gold. The White House also expressed some optimism on progress. The administration’s offer has increased to $1.88 trillion, White House Chief of Staff Mark Meadows said. Nancy Pelosi is pushing for $2.2 trillion. The US will release weekly initial jobless claims and September home sales data in the evening session.” 

“COMEX gold trades modestly lower near $1919/oz as the US Dollar Index bounced back by 0.30 percent. In yesterday’s session, gold once again failed to break past $1,940 which is now a strong resistance zone. Gold remains choppy as market players continue to assess the feasibility of the US stimulus deal as well as the UK-EU Brexit deal. However, the bias remains on the upside amid increasing challenges to the global economy. For the bulls to take the prices higher gold should sustain above the key $1940/oz mark,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 81.79 to 1, which means the amount of silver required to buy one ounce of gold. 

Silver prices declined Rs 484 to Rs 62,779 per kg from its closing on October 21.

In the futures market, the gold rate touched an intraday high of Rs 51,199 and an intraday low of Rs 50,760 on the Multi-Commodity Exchange (MCX). For the December series, the yellow metal touched a low of Rs 48,384 and a high of Rs 56,379.

Gold futures for December delivery slipped Rs 507, or 0.99 percent, at Rs 50,826 per 10 gram in evening trade on a business turnover of 13,873 lots. The same for February eased Rs 433, or 0.84 percent, at Rs 50,953 on a business turnover of 1,664 lots.

The value of the December and February contracts traded so far is Rs 3,290.03 crore and Rs 16.36 crore, respectively.

Similarly, Gold Mini contract for November edged lower by Rs 457, or 0.89 percent at Rs 50,856 on a business turnover of 8,106 lots.

Trading strategy

Sriram Iyer, Senior Research Analyst at Reliance Securities

International gold prices are trading in the red on Thursday in Asia as the US dollar rebounds after a stalemate continues over the additional coronavirus stimulus aid package. Markets could look to cues from the jobless claims and existing home sales data tonight.

Technically, LBMA Gold Spot is sustaining after giving a breakout above Falling Channel formation, while 50-DMA is holding a resistance near $1,925 levels; a breakout above this could take prices up to $1,933-$1,949 level and support is at $1,908-$$1,895 levels.

Domestic bullion prices are trading with modest losses in Thursday evening trade, tracking weak overseas prices. MCX Gold December is the same holding a resistance near 50-DMA at Rs 51,200 levels above which could see a further upside movement up to Rs 51,450-51,700 levels. However, support is placed at Rs 51,050-50,900 levels  

Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking Ltd  

As for today, traders can go for buy in gold at Rs 50,900 levels with the stop loss of Rs 50,650 levels for the target of Rs 51,500 levels.

Navneet Damani, Vice President, Motilal Oswal

The broader trend on COMEX could be in the range of $1890- 1935 and on the domestic front, prices could hover in the range of Rs 50,900-51,450.

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