Gold prices edged lower by Rs 396 to Rs 48,034 in the Bombay retail market on the weak global trend and strong rupee. The gold prices traded in a narrow range ahead of US jobs data later in the week and rising Delta variant of coronavirus cases supporting the safe-haven appeal.
Gold Prices Drop Today
The bullion price climbed Rs 1,677 or 3.59 percent in the domestic market during July month. The price of 10 gram, 22-carat gold prices in Mumbai was Rs 43,999 plus 3 percent GST, while 24-carat 10 gram stood at Rs 48,034 plus GST. The 18-carat gold is quoted at Rs 36,026 plus GST in the retail market.
As per US CFTC data, COMEX gold prices speculators cut the net long positions by 3,004 contracts to 105,811 in the week to July 27. The US Federal Reserve Chair Jerome Powell said the central bank wasn’t ready to think of raising U.S. interest rates as it was still focused on buying assets to support an economy recovering from the coronavirus pandemic.
Market participants will keep an eye on the Manufacturing PMI data scheduled later today; which if reported better than expected it could weigh on the gold price. The US dollar traded weaker at 91.96, down 0.25 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 1,031.46 tonnes. The ETF has a market value of $60.52 billion. Spot gold dropped by $5.89 to $1,808.18 an ounce at 1206 GMT in London trading. MCX Bulldesk decreased by 27 points or 0.18 percent, at 14,621 at 17:37. The index tracks the real-time performance of MCX Gold and MCX Silver futures.
Gold Prices Drop Today
“Gold prices edged lower after a brief rally witnessed last week amidst a firm dollar. Metal price hit a 2 week high after Powell said the U.S. job market still had some ground to cover before the Fed would pull back support. U.S. Fed Governor Powell reassured the marker that a rate hike was not on the cards for the time being,” said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.
“Tussle between the US-China is increasing the worries in the market. On the other hand, fear of delta variant has forced many countries to re-impose their lockdown restriction. The US also reversed its no mask policy and urged everyone to be cautious” Damani noted.
The Broader range on COMEX could be between $1804- 1824 and on the domestic front, prices could hover in the range of Rs 47,700- 48,250. The gold/silver ratio currently stands at 70.73 to 1, which means 70.73 ounces of silver is required to buy an ounce of gold. Silver prices eased by Rs 147 to Rs 67,906 per kg against its closing price on July 30.
In the futures market, the gold rate touched an intraday high of Rs 48,030 and an intraday low of Rs 47,816 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 128, or 0.27 percent, to Rs 47,873 per 10 gram in evening trade on a business turnover of 12,870 lots. The same for December slide Rs 73, or 0.15 percent, to Rs 48,100 on a business turnover of 592 lots.
The value of October and December’s contracts traded so far is Rs 1,346.97 crore and Rs 15.88 crore, respectively. Similarly, Gold Mini contract for September weakened by Rs 105, or 0.22 percent at Rs 47,483 on a business turnover of 12,598 lots.