Gold prices remain flat at Rs 51,306 per 10 gram; silver falls by Rs 1,007 a kg

Gold prices were steady at Rs 51,306 per 10 gram in the Mumbai retail market on a sharp fall in rupee and weak global cues. The precious metal traded lower amid growing worries over the possibility of the contested US election outcome and firm dollar.

The rate of 10 gram 22-carat gold in Mumbai was Rs 46,996 plus 3 percent GST, while 24-carat 10 gram was Rs 51,306 plus GST. The 18-carat gold quoted at Rs 38,480 plus GST in the retail market.

Bullion prices are trading under pressure on the stronger dollar as the latest US election trend showed a closed fight between US President Donald Trump and his challenger Joe Biden. Global risk appetite has been hurt amid growing concern that the US is heading for a contested election.

The FOMC will begin its two-day policy meeting later in the day, with policymakers expected to reaffirm its commitment to support the pandemic-struck economy and keep interest rates unchanged. The BOE's policy meeting will also be in focus later this week, adding to the volatility in the market.

The US dollar trades lower at 93.68 or up 0.12 percent in the evening session against a basket of currencies.

Spot gold was trading down $6.47 at $1,902.72 an ounce at 1205 GMT in London trading.

Gold holdings in SPDR ETF were unchanged at 1,255.91 tonnes, the lowest since September 17. 

MCX iCOMDEX Bullion Index was down 111.35 points, or 0.70 percent, at 15,694.11 at 17:37. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal said, “Gold steadied on Wednesday as investors keenly watched the final few hours of a close US Presidential election. National polls and the speculations regarding the election is creating a lot of ambiguity in the market. Although, the winner - who may not be determined for days - will lead a nation strained by the COVID-19 pandemic that has killed more than 231,000 people and left millions more jobless, racial tensions and political polarisation has only worsened during a vitriolic campaign, keeping the metal prices firm at lower levels.” 

The broader trend on COMEX could be in the range of $1865- 1915 and on the domestic front prices could hover in the range of Rs 50,800-51,550.

Hareesh V, Head of Commodity Research, Geojit Financial Services, said “Gold continues to be choppy ahead of the uncertain results of US presidential election and a volatile currency market. Meanwhile, hopes of more fiscal stimulus measures, escalating US-China trade tensions and rising new pandemic cases continue to offer lower-level support to the yellow metal.”

The gold/silver ratio currently stands at 83.77 to 1, which means the amount of silver required to buy one ounce of gold. 

Silver prices declined Rs 1,007 to Rs 61,243 per kg from its closing on November 3.

In the futures market, the gold rate touched an intraday high of Rs 51,465 and an intraday low of Rs 50,988 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 eased Rs 254, or 0.49 percent, at Rs 51,344 per 10 gram in evening trade on a business turnover of 12,690 lots. The same for February edged lower Rs 185, or 0.36 percent, at Rs 51,523 on a business turnover of 3,056 lots.

The value of the December and February contracts traded so far is Rs 3,880.95 crore and Rs 128.62 crore, respectively.

Similarly, Gold Mini contract for December slipped Rs 262, or 0.51 percent at Rs 51,372 on a business turnover of 10,171 lots.

Trading strategy

Tapan Patel- Senior Analyst (Commodities), HDFC Securities

Gold prices traded lower with COMEX spot gold prices declined to $1m894 on Wednesday. Gold December future contract at MCX was trading half a percent down to Rs 51,263 per 10 grams for the day limiting downside on rupee depreciation.

Gold prices witnessed selling in COMEX on the stronger dollar. Gold prices are trading under pressure as polls are showing balanced voting for the US presidential race which has boosted buying in the dollar.

We expect gold prices to trade sideways to up with COMEX gold resistance at $1,910 and support at $1,880. MCX Gold December support lies at Rs 50,900 with resistance at Rs 51,600.

Ravindra Rao, VP-Head Commodity Research, Kotak Securities

COMEX gold trades lower near $1892/oz as market players position for the outcome of the US election. Price is currently lower as the US dollar trades marginally higher. Amid other factors, gold is supported by expectations of additional stimulus measures and rising virus cases. Gold may witness choppy trade as the market reacts to the outcome of the US election. However, the hopes of additional stimulus measures may keep the price supported.

Sriram Iyer, Senior Research Analyst at Reliance Securities

International gold prices are trading weak as investors continued to have faith in the dollar over US election outcome concerns. We believe that if it’s a contested election we could witness investors continue to pour money in the dollar and keep any upside capped for gold.

Technically, LBMA Gold Spot has retreated from 50-DMA at $1,913 levels and is trading below $1,900 levels indicating downward pressure to continue in coming sessions. Resistance zone is at $1,920-$1,931 levels. Support holds at $1,882-$1,870 levels.

Domestic gold prices are trading weak, tracking weak overseas prices.

Technically, MCX Gold December is sustaining above Rs 51,000 levels where Rs 50,900 holds strong support below which will trigger Bearish Reversal in the counter. Resistance is at Rs 51,300-51,650 levels and support holds at Rs 50,900-50,700 levels.

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