Gold prices were steady at Rs 47,968 per 10 gram in the Mumbai retail market on rupee depreciation and lacklustre overseas cues on February 11. The yellow metal witnessed directionless trade due to a lack of fresh triggers.
The rate of 10 gram 22-carat gold in Mumbai was Rs 43,939 plus 3 percent GST, while 24-carat 10 gram was Rs 47,968 plus GST. The 18-carat gold quoted at Rs 35,976 plus GST in the retail market.
US Federal Reserve chief Jerome Powell said on February 10 a “patiently accommodative monetary stance” was important to boost labour market and the overall economy following a stall in recent months.
The yellow metal demand dampened due to a decrease in US inflation data, however, the downside movement was capped by hopes of further stimulus measures.
The dollar was steady at 90.36, or 0.00 percent against a basket of six currencies after declining for four straight sessions.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, decreased by 1.7 tonnes to 1,146.59 tonnes.
Spot gold was down $0.62 to $1,842.35 an ounce at 1156 GMT in London trading.
MCX Bulldesk was down 1 point, or 0.01 percent, at 15,165 at 17:27. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Navneet Damani, Vice President, Motilal Oswal said, “Gold continued to trade higher, extending its recovery from last week’s tumble, on expectations that the US economy will experience a “reflation” pop from President Joe Biden’s planned $1.9 trillion Covid-19 stimulus. Fed Governor J Powell, meanwhile, in his speech to the New York Economic Club addressed that the US was “still very far” from a strong jobs market and that inflation was not expected to grow meaningfully in the near term.”
Market participants are keeping an eye on the updates on the first call between the US and China since Biden took the office. Investors' focus will also be on the US weekly jobless claims data, which, if better than expected, could further support the metal prices.
The broader range on COMEX could be between $1,825 and 1,850 and on the domestic front, the price could hover in the Rs 47,550- 48,050 range.
“Technically, international gold is trading flat near $1,850 levels. It holds support near $1,830-1,825 levels, above which bullish momentum is likely to continue while resistance is at $1,860-1,870 levels.” On the domestic front, MCX Gold is likely to trade above support levels of Rs 47,800-47,700 in the upcoming session," said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.
The gold/silver ratio stands at 70.26 to 1, which means the number of silver ounces required to buy one ounce of gold.
Silver prices plunged Rs 717 to Rs 68,266 per kg from its closing on February 10.
In the futures market, the gold rate touched an intraday high of Rs 48,045 and an intraday low of Rs 47,727 on the Multi-Commodity Exchange (MCX). For the April series, the yellow metal touched a low of Rs 46,611 and a high of Rs 51,931.
Gold futures for April delivery declined Rs 58, or 0.12 percent, at Rs 47,955 per 10 gram in evening trade on a business turnover of 12,378 lots. The same for June slipped Rs 23, or 0.05 percent, at Rs 48,112 on a business turnover of 1,183 lots.
The value of the April and June contracts traded so far is Rs 1,658.40 crore and Rs 9.12 crore, respectively.
Similarly, Gold Mini contract for March slides Rs 23, or 0.05 percent at Rs 47,840 on a business turnover of 16,860 lots.
Trading Strategy
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices kept trading firm on February 11 after witnessing selling in early trade on a stronger dollar and weak US inflation data. Gold prices are expected to trade in the current range on mixed global cues and stimulus expectations.
We expect gold prices to trade sideways-to-up, with the Comex spot gold support at $1,820 and resistance at $1,860. MCX Gold April support lies at Rs 47,600 and resistance at Rs 48,200.
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