Gold prices slip marginally to Rs 51,394 per 10 gram, silver down Rs 201 per kg

The uncertainty over BREXIT withdrawal, US-China tensions and rising coronavirus cases has kept risk premium high in the gold prices.

Gold prices fell marginally to Rs 51,394 per 10 gram in the Mumbai market on rupee appreciation and subdued global cues. Mixed global cues on dollar weakness and global economic growth concerns supported the precious metal.

The rate of 10 gram 22-carat gold in Mumbai was Rs 47,077 plus 3 percent GST, while 24-carat 10 gram was Rs 51,394 plus GST. The 18-carat gold quoted at Rs 38,546 plus GST in the retail market.

The US dollar index, measured against a basket of six currencies was trading down 0.34 percent to trade at 93.01. The yellow metal has weakened ahead of US Federal Reserve monetary policy meeting later this week.

The uncertainty over BREXIT withdrawal, US-China tensions and rising coronavirus cases has kept risk premium high in the gold prices.

MCX iCOMDEX Bullion Index rose 83.75 points, or 0.52 percent, at 16,136.45 at 17:41. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

Navneet Damani, Vice President, Motilal Oswal said, “Gold in the past few weeks has been consolidating in a broad range of $1,920 and $2,000 despite increased uncertainty between the US and China. The better-than-expected economic number from the US strengthened the dollar against its major crosses and kept gold gains in check."

This week, Damani believes, market participants will be keeping an eye on the Fed policy statement and expectation is that the central bank could keep a dovish outlook. Commentary from the Fed Chairman will be important to determine a trend for the yellow metal, he said.

Today, volatility for the greenback as well as gold is expected to remain low as no major economic data is expected to be released from the US. For today we expect gold on MCX to quote in the range of Rs. 51,100 and Rs. 51,950. On COMEX the expected range is $1,900 and $1,960.

“COMEX gold trades marginally higher $1952/oz.Gold ended higher last week but witnessed choppy trade in a broad range of $1911-1974/oz. Gold has witnessed mixed trade reflecting choppiness in equity markets and US dollar index. We may see directionless trade continuing unless either side of $1900-2000/oz range is broken”, said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The gold/silver ratio currently stands at 78.79 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices declined Rs 201 to Rs 65,223 per kg from its closing on September 11.

In the futures market, gold rate touched an intraday high of Rs 51,599 and an intraday low of Rs 51,334 on the Multi-Commodity Exchange (MCX). For the October series, the yellow metal touched a low of Rs 45,596 and a high of Rs 56,191.

Gold futures for October delivery gained Rs 226, or 0.44 percent, at Rs 51,545 per 10 gram in evening trade on a business turnover of 11,678 lots. The same for December was up Rs 205, or 0.40 percent, at Rs 51,699 on a business turnover of 6,782 lots.

The value of the October and December’ contracts traded so far is Rs 2,356.50crore and Rs 319.98 crore, respectively.

Similarly, Gold Mini contract for October jumped Rs 217, or 0.42 percent at Rs 51,610 on a business turnover of 15,649 lots.

Tapan Patel- Senior Analyst (Commodities), HDFC Securities expects gold prices to trade sideways to up with support at $1,910 and resistance at $1,970. MCX Gold October has support at Rs 50,900, resistance lies at Rs 51,800.

At 1222 (GMT), spot gold was up $9.06 at $1,949.42 an ounce in London trading.

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