Gold prices were steady at Rs 48,050 per 10 gram in the Mumbai retail market on continuing appreciation in rupee despite bullish global trend. The yellow metal was supported by weakness in the dollar index and rising coronavirus cases boosting safe-haven appeal.
The price of 10 gram, 22-carat gold in Mumbai was Rs 44,014 plus 3 percent GST, while 24-carat 10 gram stood at Rs 48,050 plus GST. The 18-carat gold is quoted at Rs 36,038 plus GST in the retail market.
The ADP jobs data is due later in the day which could give us a direction on US non-farm payroll numbers, scheduled later this week.
Along with that, Service PMI data is also expected from major economies scheduled today.
Market participants remain on the sidelines as they keenly await US jobs data later this week which could influence the Federal Reserve’s tapering plans.
The US dollar traded slightly lower at 92.06, down 0.02 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund fell by 1.74 tonnes to 1,027.97 tonnes. The ETF has a market value of $59.88 billion.
Spot gold advanced by $8.64 to $1,819.19 an ounce at 1203 GMT in London trading.
MCX Bulldesk increased by 55 points or 0.38 percent, at 14,675 at 17:32. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices trade in a narrow range, with investors awaiting signals from US jobs data on the labour market recovery that could influence the Fed's policy decisions. US yields saw a fall in the previous session, hovering below the 1.2 marks. New orders for US-made goods were reported better than expected in June, which lent some support to the greenback. With the fear of delta variant rising globally, economic data points for will be important to gauge the overall growth of the economy,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be $1,800-1,835 and on the domestic front, prices could hover in the range of Rs 47,800- 48,240.
Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers, said, “The gold market appears to be stuck. Bullion futures are trading in a narrowing range, with the difference between daily high and low prices shrinking. The metal is caught in a tug-of-war as traders weigh a plunge in inflation-adjusted interest rates that’s supporting gold against worries that the Federal Reserve could soon start to scale back its massive economic stimulus programme, and many are waiting to see whether Friday’s US payrolls report will sway monetary policy and help break the deadlock."
The gold/silver ratio currently stands at 70.41 to 1, which means 70.41 ounces of silver is required to buy an ounce of gold.
Silver prices jumped by Rs 489 to Rs 68,241 per kg against its closing price on August 3.
In the futures market, the gold rate touched an intraday high of Rs 48,072 and an intraday low of Rs 47,852 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 46,650 and a high of Rs 50,040.
Gold futures for October delivery rose Rs 207, or 0.43 percent, to Rs 48,071 per 10 gram in evening trade on a business turnover of 12,587 lots. The same for December soared Rs 180, or 0.37 percent, to Rs 48,255 on a business turnover of 722 lots.
The value of October and December’s contracts traded so far is Rs 1,126.45 crore and Rs 14.93 crore, respectively.
Similarly, Gold Mini contract for September gained Rs 167, or 0.35 percent at Rs 48,018 on a business turnover of 12,785 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
We expect gold prices to trade sideways to up with COMEX spot gold resistance at $1820 and support at $1805 per ounce. MCX Gold October support lies at Rs 47,800 and resistance at Rs 48,100 per 10 gram.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, International Gold is trading in a choppy manner below $1,820. Prices tested the resistance of $1,827-1,833 levels in the previous week and sustained below. On the domestic front, MCX October gold prices traded in a choppy manner. If this market breaches this level with sufficient volume, we can expect a price decrease to Rs 47,650-47,580 levels.
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