Gold Prices & Trading Strategy

Gold prices soared by Rs 154 to Rs 48,217 per 10 grams in the Mumbai bullion market due to a sharp fall in the rupee despite muted global trend. The yellow metal traded lower in the global market ahead of US inflation data and firm US dollar.

The price of 10 gram 22-carat gold in Mumbai was Rs 44,308 plus 3 percent GST, while 24-carat 10 gram stood at Rs 48,371 plus GST. The price of 18-carat gold was quoted at Rs 36,278 plus GST in the retail market.

However, supporting the bullion price is the major central bank stance on keeping interest rates low in the near term.

Data revealed that the US Core producer price index was reported at 0.4 percent against the market expectations of 0.5 percent in October.

Investors are cautious ahead of the US inflation data to be released later in the day. The tight US labour market and the dislocation in global supply chains could result in a high reading for US consumer prices. Focus today will also be on the US weekly jobless claims data.

“Gold price continues to hover around the important $1,830 level, marking the highest since early Sept. Prices got a modest boost after weak US data, steady dollar and fall in U.S. Yields. Fall in yields, an uptick in dollar and anticipation ahead of the US CPI data scheduled later today is keeping market participants on the edge”, said Navneet Damani, VP – Commodities Research at Motilal Oswal Financial Services.

The broader range on COMEX could be between $1800-1840 and on the domestic front, prices could hover in the range of Rs 48,000- 48,500.

Gold holdings in SPDR Gold Trust, the worlds largest gold-backed exchange-traded fund remained unchanged at 975.41 tonnes. The ETF has a market value of $57.29 billion.

The dollar index edged higher to 94.27, up 0.32 percent against a basket of six rival currencies.

Spot gold dropped by $6.63 at $1,825.28 ounce at 1212 GMT in London trading.

MCX Bulldek eased by 4 points or 0.03 percent to 14,446 at 5.43 pm. The index tracks the real-time performance of MCX Gold and MCX Silver futures.

The gold-silver ratio stands at 74.92 to 1, which means 74.92 ounces of silver is required to buy an ounce of gold.

Silver prices corrected by Rs 224 to Rs 64,556 a kg against its closing price on November 9.

In the futures market, the gold price touched an intraday high of Rs 48,362 and an intraday low of Rs 48,168 on 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 mildly rose Rs 13, or 0.03 percent, at Rs 48,300 in the evening trade on a business turnover of 7,408 lots. The same for February gained by Rs 10, or 0.02 percent, to Rs 48,466 on a business turnover of 5,801 lots.

The value of December and February contracts traded is Rs 1,274.01 crore and Rs 313.41 crore, respectively.

The Gold Mini contract for December climbed by Rs 42, or 0.09 percent, at Rs 48,305 on a business turnover of 15,028 lots.

Trading Strategy

LBMA Gold spot has resumed slightly gapped lower today morning at $1,829.96, down by 0.67 percent from the previous closing, moving in a negative trend so far towards the psychological support of $1,820. The price has retreated because of the dollar strength.

On the domestic front, MCX Gold December is moving in a sideways mode around the support of 15-EMA of intraday chart placed near Rs 48,220. The key resistance would be near Rs 48,310 – high of the last season and if this level gets breakout, we may expect positive momentum by evening session towards Rs 48,400-48,425.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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