MCX Gold prices declined by Rs 213 to Rs 40,080 per 10 gram in the Mumbai bullion market on rupee depreciation. It, however, traded steady in the international market ahead of European Central Bank’s first policy meet of the New Year later today.
The rate of 10 grams 22-carat gold in Mumbai was Rs 36,661 plus 3 percent GST, while 24-carat 10 gram was Rs 40,080 plus GST. The 18-carat gold quoted at Rs 30,017 plus GST in the retail market.
According to Navneet Damani, Vice President, Motilal Oswal, gold prices held steady in the previous session on rising fears over the spread of china’s new flu-like virus. Within just a few days China’s new coronavirus claimed 25 deaths and more than 540 cases have been reported till now, forcing the city to close transportation networks and urge citizens not to leave.
All eyes today will be on the ECB policy meeting where although no major announcements are expected, comments from Governor Lagarde will be closely watched.
The broader trend on Gold Comex could be $1,540-1,570 and on domestic front prices could hover in the range of Rs 39,700- 40,300, added Damani.
Gold is struggling in a range as demand from China is not expected to improve after a breakout of coronavirus. Even the physical demand for precious metals in India is likely to remain subdued as the IMF has forecast weak economic growth in the country.
Further added an accommodative monetary policy and lower interest rates from the ECB will support gold demand.
The gold/silver ratio that refers to the amount of silver required to buy an ounce of gold currently stands at 87.34 to 1.
Silver prices fell Rs 290 to Rs 45,820 per kg from its closing on January 22.
The value of the February contract traded so far is Rs 1,950.68 crore and April contract saw the value of Rs 361.37 crore.
Similarly, Gold Mini contract for February was down by Rs 28, or 0.07 percent at Rs 39,865 in a business turnover of 7,633 lots.
spot gold was down $4.04 at $1,554.58 an ounce in London trading.
The brokerage firm said spot gold has key support at $1,532 whereas resistance is at $1,572.
MCX Gold has support at Rs 39,670-39,580 whereas resistance is at Rs 40,050-40,220. The bias remains sideways for the day. Price sustainability above the immediate resistance level of Rs 40,050 will give further momentum in the trend, according to Motilal Oswal.