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Gold prices flat at Rs 48,171/10 gm on firm rupee, weak global cues; silver slips Rs 200 a kg –

Gold prices were steady at Rs 48,171 for 10 grams in the Mumbai bullion market on rupee appreciation and subdued global trends. The precious metal managed to trade above the $1,800 level on rising coronavirus cases in China and inflationary pressure globally.

The price of 10 gram 22-carat gold in Mumbai was Rs 44,125 plus 3 percent GST, while 24-carat 10 gram stood at Rs 48,171 plus GST. The 18-carat gold quoted at Rs 36,128 plus GST in the retail market.

“Technically, International gold is trading with marginal negative bias near $1,800/ levels. Market is resisting below $1,815-1,810 levels. On the domestic front, MCX December Gold is trading with a bearish bias. In the previous session, prices traded above Rs 48,250 levels after more than two months. We may expect the market to rise in the coming session to trade above Rs 48,300”, said Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited.

Investors will keep an eye on meetings from the Bank of Japan and the European Central Bank on Thursday. Today, the focus will be on US Consumer confidence data to be released later in the day.

Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel One Ltd said, “Increasing bets over the current inflation not being a transitory element has been supportive of gold as it is widely considered as a hedge against inflation and currency debasement.”

However, no signs of increasing interest rate by the US Central bank further levied some support for the yellow metal, he added.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund remained unchanged at 978.07 tonnes, the lowest level in 2021. The ETF has a market value of $56.75 billion.

The dollar index traded modestly lower at 93.74, up 0.07 percent against a basket of six rival currencies. The fall in the greenback makes bullion cheaper for other currency holders.

Spot gold fell by $3.21 to $1,804.45 an ounce at 1208 GMT in London trading.

MCX Bulldek decreased by 20 points or 0.14 percent to 14,516 at 5.41 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

The gold-silver ratio stands at 73.59 to 1, which means 73.59 ounces of silver is required to buy an ounce of gold.

Silver prices fell by Rs 200 to Rs 65,453 per kg against its closing price on October 25.

In the futures market, the gold price touched an intraday high of Rs 48,280 and an intraday low of Rs 48,050 on the Multi-Commodity Exchange (MCX). For the December series, the yellow metal touched a low of Rs 45,705 and a high of Rs 48,899.

Gold futures for December delivery slipped by Rs 65, or 0.13 percent, at Rs 48,135 in evening trade on a business turnover of 11,171 lots. The same for February edged lower by Rs 86, or 0.18 percent, to Rs 48,242 on a business turnover of 3,511 lots.

The value of December and February contracts traded so far is Rs 1,479.06 crore and Rs 34.26 crore, respectively.

Similarly, the Gold Mini contract for November declined by Rs 72, or 0.15 percent, at Rs 47,958 on a business turnover of 7,920 lots.

Trading Strategy

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices traded under pressure on Tuesday on stronger dollar and rise in US bond yields. The dollar index rose after China shifted its policy towards growth while investors are awaiting an outcome from the Bank of Japan and ECB policy meetings. 

We expect gold prices to trade sideways to down with COMEX spot gold resistance at $1810 and support at $1785 per ounce. MCX Gold December support lies at Rs. 47900 and resistance at Rs.48400 per 10 gram.

Axis Securities

MCX Gold price is forming strong resistance near Rs 48,300 and failing to break, price is expected to trade negatively. Any breakdown below Rs 47,900 would drag the price lower towards Rs 47,600-47,500 levels intraday.

Axis Securities Axis Securities

The momentum indicator hourly Relative Strength Index (RSI) is trading at 50 and it is forming lower lows which is a bearish sign.

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