Gold prices fell marginally to Rs 48,006 per 10 gram in the Mumbai retail market on rupee appreciation and subdued global trend. The yellow metal has been stuck in a range since July amid a lack of clear direction.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,973 plus 3 percent GST, while 24-carat 10 gram stood at Rs 48,006 plus GST. The 18-carat gold is quoted at Rs 36,005 plus GST in the retail market.
Fed Vice Chair Clarida said the conditions for raising interest rates could be met by the end of 2022, and suggested the central bank could start cutting back on the asset purchase programme later this year.
COVID-19 cases worldwide surpassed 200 million yesterday, according to a Reuters’ tally, as the Delta variant threatens areas with low vaccination rates.
Investors will keep an eye on the BOE policy meet and US weekly jobless claims data scheduled later today.
The US dollar traded marginally down at 92.17, down 0.09 percent against a basket of six rival currencies.
Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund was unchanged at 1,027.97 tonnes. The ETF has a market value of $60.42 billion.
Spot gold fell slightly by $0.89 to $1,810.94 an ounce at 1217 GMT in London trading.
MCX Bulldesk rose by 1 point or 0.01 percent, at 14,598 at 17:48. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
“Gold prices showed some strength although after a positive Service PMI, remarks from fed official regarding policy tightening and the firm dollar, it came back to trading in its narrow range. Bullions rose more than 1% in the previous session after the private payroll data showed U.S. private payrolls increased far less than expected in July. While, on other hand, A measure of U.S. services industry activity jumped to a record high in July, boosted by the shift in spending to services,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
The broader range on COMEX could be between $1797- 1835 and on the domestic front, prices could hover in the range of Rs 47,700- 48,130.
Jigar Trivedi, Research Analyst- Commodities Fundamental, Anand Rathi Shares & Stock Brokers, said, “For intraday, MCX Gold October future is expected to decline during the session since the dollar has rebounded after Fed Vice-Chair’s hawkish statements on rate hike. The bullish comments on the US economy, by Fed Vice Chair Richard Clarida, triggered a rebound in US Treasury yields and turned market attention away from the release of an unexpectedly weak private employment report that had driven the dollar down initially. But, a measure of U.S. services industry activity jumped to a record high in July, boosted by the shift in spending to services and dollar recovered fully.”
He said MCX Gold October Future may fall to Rs 47,750 per 10 gram and MCX Silver September is expected to decline to Rs 67,200 per kg.
The gold/silver ratio currently stands at 71.01 to 1, which means 71.01 ounces of silver is required to buy an ounce of gold.
Silver prices tumbled Rs 645 to Rs 67,596 per kg against its closing price on August 4.
In the futures market, the gold rate touched an intraday high of Rs 47,940 and an intraday low of Rs 47,782 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 slipped Rs 77, or 0.16 percent, to Rs 47,815 per 10 gram in evening trade on a business turnover of 12,523 lots. The same for December eased Rs 19, or 0.04 percent, to Rs 48,070 on a business turnover of 918 lots.
The value of October and December’s contracts traded so far is Rs 1,359.22 crore and Rs 18.26 crore, respectively.
Similarly, Gold Mini contract for September decreased Rs 55, or 0.11 percent at Rs 47,803 on a business turnover of 13,088 lots.
Trading Strategy
Tapan Patel- Senior Analyst (Commodities), HDFC Securities
Gold prices witnessed sharp selling on FED comments despite weak job market data and fall in bond yields. The Fed Vice Chair Richard Clarida said conditions for an interest rate hike could be met in late 2022, setting the stage for a move in early 2023. The dollar index rallied pushing gold prices lower on signals of early FED tapering.
We expect gold prices to trade sideways to up with COMEX spot gold resistance at $1,820 and support at $1,805 per ounce. MCX Gold October support lies at Rs 47,600 and resistance at Rs 48,100 per 10 gram.
Geojit Financial Services
Geojit Financial Services
The major weakness is expected only below the Bollinger lower band region of Rs 47,600. Meanwhile, a rebound above Rs 47,900 may strengthen the price.
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