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India Bullion: Gold prices fall on firm rupee; US jobs data in focus

Informist, Thursday, Jun 1, 2023


By Sandeep Sinha


MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India despite positive cues from COMEX today because of a sharp appreciation in the rupee against the dollar, which makes precious metals priced in dollars cheaper for domestic buyers.


The rupee gained 0.4% against the dollar due to better-than-expected domestic GDP growth in Jan-Mar. India’s GDP growth rose to 6.1% in Jan-Mar, way higher than the consensus estimate. According to an Informist poll, the GDP growth in the March quarter was seen at 5.1%.


“Gold prices retreated as better-than-expected US macro data gave space to Federal Reserve to stay with hawkish policy. A higher interest rate is negative for non-yielding metal. US JOLTs job openings unexpectedly rose in April and data for the prior month was revised higher, pointing to persistent strength in the labour market that could increase the possibility that the Federal Reserve raise interest rates again in June,” said Saumil Gandhi, senior analyst-commodities at HDFC Securities.


However, the downside in the yellow metal was limited due to a weaker dollar ahead of US nonfarm payroll data on Friday. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 104.11.


Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained steady at 939.56 tn. The fund has a market value of $58.31 bln.


The price of 10 gm 22-carat gold in the Mumbai bullion market was 59,916 rupees plus 3% goods and services tax, while that of 24-carat 10 gm was 60,157 plus GST. The price of 18-carat gold was quoted at 55,104 plus GST in the retail market.


The government has cut the base import price of gold by $21 to $629 per 10 gm, according to a notification by the Central Board of Indirect Taxes and Customs on Wednesday. It also reduced the duty on silver by $19 to $754 per kg.


The spot gold-silver ratio, also known as mint ratio, was lower at 83.75, indicating that silver has outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold.

MCX Bulldex, an index tracking the real time performance of gold and silver futures on the MCX, was down 85 points, or 0.5%, at 16115 points as of 1820 IST.


The August and October gold contracts recorded turnovers of 28.66 bln rupees and 560.25 mln rupees, respectively. At 1820 IST, the July and September silver contracts saw turnovers of 20.75 bln rupees and 1.0 bln rupees, respectively.


On the technical, the gold has been trading above 5-, 100-, and 200-day simple moving averages, but lower than the 20- and 50-day simple moving averages on the daily chart. The momentum indicator Relative Strength Index was at 47.81, indicating a mildly bearish cue.


* At 1830 IST, following were the most active contracts of bullion:
 -August gold was down 0.4% at 59,900 rupees per 10 gm on MCX
 -August gold was up 0.2% at $1,984.85 an ounce on COMEX
 -July silver was down 0.6% at 71,654 rupees per kg on MCX
 -July silver was up 0.1% at $23.60 an ounce on COMEX
* Outlook for the rest of the session:
 -MCX gold seen at 59,500–60,500 rupees per 10 gm
 -COMEX gold seen at $1,950–$1,985 an ounce
 -MCX silver seen at 70,100-72,500 rupees per kg
 -COMEX silver seen at $23.15-$23.65 an ounce



US$1 = 82.40 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Tanima Banerjee



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Source: Cogencis

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