Gold eases to Rs 49,046 per 10 gram on a firm dollar, silver also falls
Mumbai-India (Dec 11) Gold prices fell Rs 145 to Rs 49,046 per 10 gram in the Mumbai retail market on a firm dollar and subdued global cues. The precious metal traded under pressure on optimism surrounding coronavirus vaccine after the USFDA approved Pfizer/BioNTech jab for emergency use.
The metal has dropped Rs 270, or 0.55 percent, in the domestic market this week and traded lower in four of the five sessions.
The rate of 10 gram 22-carat gold in Mumbai was Rs 44,926 plus 3 percent GST, while 24-carat 10 gram was Rs 49,046 plus GST. The 18-carat gold quoted at Rs 36,785 plus GST in the retail market.
The US inflation data matched with the previous months’ number, whereas weekly jobless claims data was at March levels amid some restrictions being imposed again.
The dollar traded higher at 90.99, or up 0.19 percent, in the evening session against a basket of currencies.
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Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged for the third day at 1,179.78 tonnes.
Spot gold declined by $3.69 at $1,833.03 an ounce at 1200 GMT in London trading.
MCX Bulldesk was down 9 points, or 0.06 percent, at 15,149 at 1731 hours. The index tracks the real-time performance of MCX gold and silver futures.
Navneet Damani, Vice President, Motilal Oswal said, “Gold prices traded with limited volatility in yesterday's session. On one hand, rising coronavirus cases, weak jobs data and stimulus measures from ECB put up a good case for gold, while FDA's nod for temporary use of Pfizer's vaccine increased the overall optimism.”
The ECB governor rolled out yet more stimulus and showed concerns regarding the economic growth amid the rising COVID-19 cases , he said.
The broader trend on COMEX could be in the range of $1,820- 1,855 and on the domestic front, prices could hover in the Rs 48,900-49,350 range.
Comex gold was trading marginally higher near $1,842, supported by weaker dollar, disappointing US economic data, ECB’s monetary easing, rising virus cases, Brexit uncertainty and increased US-China tensions, said Ravindra Rao, VP-Head Commodity Research, Kotak Securities.
"However, weighing on price is vaccine progress and lack of ETF buying. Gold may struggle for direction amid mixed cues, however, vaccine optimism and US stimulus delay may keep the pressure on prices. Technically, $1,823 would act as good resistance, until that holds, it will be difficult for the bears to hold it lower for longer," said Rao.
The gold/silver ratio currently stands at 78.81 to 1, which means the amount of silver required to buy one ounce of gold.
Silver slipped Rs 368 to Rs 62,232 per kg from its closing on December 10.
In the futures market, gold touched an intraday high of Rs 49,174 and an intraday low of Rs 48,875 on MCX. For the February series, the yellow metal touched a low of Rs 41,560 and a high of Rs 57,100.
Gold futures for February delivery gained Rs 43, or 0.09 percent, at Rs 49,120 per 10 gram in the evening trade on a business turnover of 11,939 lots. The same for April jumped Rs 46, or 0.09 percent, at Rs 49,199 on a business turnover of 962 lots.
The value of the February and April contracts traded so far is Rs 2,295.32 crore and Rs 45.70 crore, respectively.
Similarly, the Gold Mini contract for January rose Rs 47, or 0.19 percent, at Rs 49,128 on a business turnover of 12,650 lots.
Trading Strategy
Tapan Patel-Senior Analyst (Commodities), HDFC Securities
We expect gold prices to trade sideways to down with Comex gold resistance at $1,850, support at $1,820. MCX December gold support is at Rs 48,800 with resistance at Rs 49,500.
Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited
Technically, spot gold is trading below its 21-daily moving average, suggesting bearish momentum for the upcoming session. Gold has support at $1,826-1,816, whereas resistance is at $1,845-1,854.
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