India October gold futures rose higher on July 31, tracking international spot prices that remained firm amid weak dollar and worries over the global economic fallout from the mounting coronavirus cases.
Spot gold was steady at $1,958.99 per ounce. Bullion has risen 10 percent, so far, this month, its biggest percentage rise since February 2016. The metal was also on track for its eighth straight weekly gain, a Reuters report said.
“The dollar index fell 0.3 percent to a more than two-year low against its rivals after US President Donald Trump suggested an election delay,” added the report. A weaker dollar makes gold cheaper for holders of other currencies.
On the Multi-Commodity Exchange (MCX), October gold contracts were trading higher by 0.89 percent at Rs 53,249 per 10 gram at 0930 hours.
Gold and silver plunged the previous day in the international market due to profit-taking at higher levels. Gold prices slipped around 0.50 percent and settled at $1944.30 per troy ounce while heavy selling pressure dragged silver down by more than 4 percent. It settled at $23.36 per troy ounce.
“Despite the big crash in the dollar index, the grim outlook of the global economy and a record decline in US quarterly GDP growth estimate by -32.9%, US unemployment claims still above 1400K, both the precious metals shows profit-taking in the international market,” Manoj Jain, Director (Head – Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.
“At MCX, gold is strongly holding 52,800 on a closing basis. If prices sustain above 53,300, it can extend the gains towards 53,550-53,700 levels. Weakness is expected in gold only when it gives a close below 52,800 levels,” he said.
International gold and silver ended lower on July 30 amid profit booking as bulls took a breather. However, the downside was limited after a historic plunge in second-quarter US GDP and Trump’s tweet about delaying the November presidential elections triggered a sell-off in US stocks and lower Treasury yields.
Technically, the MCX October gold contract had a volatile session where it traded in the 52466-53297 range as it corrected after hitting an all-time high.
Comex gold traded 0.9 percent higher near $1,960/oz after a 0.6 percent decline the previous day. Gold traded higher, supported by persistent weakness in the dollar and increasing concerns about coronavirus cases.
However, consumer demand, some better than expected economic data and lack of fresh buying by ETF investors is weighing on prices.
Gold may witness choppy trade amid lack of fresh triggers but the weakness in the dollar may support prices