On June 1, gold prices in the Mumbai retail market went up by Rs 287 to Rs 49,319 per 10 gram due to rupee depreciation and an optimistic global trend. The precious metal increased Rs 2,241 or 4.79 % in the domestic market in May, owing to a weakening dollar and rising inflationary pressures.

In Mumbai, a gram of 22-carat gold cost Rs 45,176 plus 3 % GST, while a gram of 24-carat gold cost Rs 49,319 plus GST. In the retail market, 18-carat gold is priced at Rs 36,989 plus GST.

The bullion metal has remained firm above the $1,900/oz level, and this trend is likely to continue unless the dollar makes a sharp recovery.

This week, market players would be focused on US payroll data, which is coming on Friday and is expected to show a 650,000 gain. Today, investors will moniter the Manufacturing PMI data from major economies.

The US dollar fell 0.15 % to 89.86 versus a basket of six competing currencies.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, reduced its gold reserves by 0.87 tonnes to 1,043.21 tonnes. The ETF has a market capitalization of $63.70 billion.

At 11:58 a.m. GMT, spot gold went up $1.35 to $1,908.63 per ounce in London trade.

At 17:28, MCX Bulldesk had gained 116 points, or 0.76 %, to 15,403. The index measures the performance of MCX Gold and MCX Silver futures in real-time.

“Gold prices hovered at a five-month high last week, buoyed by a weaker dollar and rising price inflation, as investors anticipated critical U.S. data this week, that could offer a better picture of total economic development. Last week, we saw U.S. consumer prices surge in April, with underlying inflation exceeding the Federal Reserve's 2% objective and achieving its highest annual rise since 1992. “Gold is regarded as an inflation hedge, although the Fed Governor has previously downplayed increasing inflationary issues,” said Navneet Damani, VP - Commodities Research, Motilal Oswal Financial Services.

The larger range on the COMEX might be between $1,900 and $1,925, while prices in the domestic realm might be between Rs 49,250 and Rs 49,750.

“COMEX gold is trading about $1910 per ounce. Gold is exchanging near January was at peak levels, backed by a weakening US dollar and choppy share trade amid ongoing discussion over inflation and monetary policy tightening. Due to virus-related limitations, costing is being weighed down by declining ETF interest and decreasing consumer demand in India. Until the US dollar recovers significantly, gold may trade with a bullish bias,” said Ravindra Rao, CMT, EPAT, VP-Head Commodity Research at Kotak Securities.

The gold/silver ratio is now 68.10 to 1, which implies that 68.10 ounces of silver are required to obtain one ounce of gold.

In comparison to its closing price on May 31, silver prices increased by Rs 1,063 to Rs 72,413 per kg.

On the Multi-Commodity Exchange, the gold rate reached an intraday high of Rs 49,721 and a low of Rs 49,433 in the futures market (MCX). The yellow metal reached a low of Rs 44,501 and then a peak of Rs 49,721 during the August sequence.

In evening trade, gold futures for August delivery rose Rs 258, or 0.52 %, to Rs 49,607 per 10 gram on a business transaction of 12,945 lots. On a commercial turnover of 851 lots, the same for October increased by Rs 303, or 0.61 %, to Rs 49,965.

The value of contracts exchanged in August and October is Rs 1,525.47 crore and Rs 169.55 crore.

The July Gold Mini contract rose by Rs 294, or 0.60%, to Rs 49,399 on a total transaction of 7,699 lots.

Trading Methodology

Tapan Patel, Senior Analyst (Commodities), HDFC Securities

Gold prices rose, increasing gains on mixed global indications as US and European markets rejoined from vacation. Investors were more concerned with the weakening dollar than with better-than-expected Chinese industrial statistics. In the morning, the dollar index was trading 0.18 % down. For a day, we anticipate gold prices to move flat to higher, with COMEX gold support at $1,900 and resistance at $1,920 per ounce. The MCX Gold August support level is Rs 49,400, while the resistance mark is Rs 49,900 per 10 gram.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global Research Limited

international gold is trading sideways with such a favorable trend. It is now trading over $1,900 and may keep doing so in the upcoming weeks. On MCX, the gold August value is trading with positive impetus with prices persisting above the 20-SMA, and we can estimate them to increase throughout the evening session trading just above the resistance area of Rs 49,500-Rs 49,700.