Gold slips Rs 1,215 to Rs 45,713, silver also slides

Gold prices slipped Rs 1,215 to Rs 45,713 per 10 gram in the Mumbai bullion market on rupee appreciation and a strong stock market. The precious metal came under pressure after US President Donald Trump’s plans to resume the US economy and optimism on potential coronavirus drug development.

The bullion price gained Rs 412, or 1.13 percent, for the week and was up 16.5 percent for the year.

Major gold-trading centres have remained shut in the country due to the lockdown announced to prevent the spread of coronavirus.

The rate of 10 gram 22-carat gold in Mumbai was Rs 41,873 plus 3 percent GST, while 24-carat 10 gram was Rs 45,713 plus GST. The 18-carat gold quoted at Rs 34,285 plus GST in the retail market.

“Gold has seen phenomenal returns in the last calendar year on the back of slowing growth and falling interest rates, but with the COVID-19 coming into the picture followed by shutting down of economies lead to a collapse of the broader economy. The coming years will see an enormous push of liquidity from central banks through printing of money and massive expansion of fiscal deficits leading to depreciating paper currencies, providing the perfect backdrop for continuation of a gold rally," Kishore Narne, Associate Director & Head Commodities and Currencies, Motilal Oswal Financial Services Ltd.

Narne foresees “gold repeating returns of 30-35 percent for the next two years as well. Indian gold prices reached an all-time high, but a large part of this has been driven by depreciating rupee and increased import duty, but international gold prices still are much lower than all-time high and have much room to grow from here”.

According to Navneet Damani, Vice President, Motilal Oswal, gold retreated after climbing 1.3 percent in the previous session, as US jobless claims fell marginally and on hopes that virus-led restrictions would ease, though concerns of a global recession kept bullion’s appeal intact.

Trump plans to announce new guidelines to reopen the economy after a month-long shutdown, despite concerns from health experts, governors and business leaders about a resurgence in cases without more testing and protocols in place.

The broader trend on Comex could be $1,680-1,725 and on the domestic front, prices could hover in the range of Rs 45,500-46,450.

The gold/silver ratio currently stands at 108.14 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices dropped Rs 1,280 to Rs 42,270 per kg from its closing on April 17. The white metal slipped Rs 50, or 0.12 percent during the week.

In the futures market, gold touched an intraday high of Rs 46,700 and an intraday low of Rs 45,614 on MCX.

For the June series, the yellow metal touched a low of Rs 36,572 and a high of Rs 47,327.

Gold futures for delivery in June slipped Rs 1,573, or 3.33 percent on the MCX closing at Rs 45,685 per 10 gram in a business turnover of 16,729 lots. Gold contracts for August delivery eased Rs 1,554, or 3.28 percent, at Rs 45,895 per 10 gram in a business turnover of 2,236 lots.

The value of the June contract traded for the day was Rs 3,695.93 crore and the August contract saw the value of Rs 237.72 crore.

Similarly, Gold Mini contract for May slides Rs 1,393, or 2.95 percent at Rs 45,810 in a business turnover of 9,233 lots.

At 12:05 pm GMT, spot gold was down by $26.33 at $1,691.43 an ounce in London trading.