Gold price slips for third day in a row to touch Rs 43,374 per 10 gram

Gold prices fell for the third consecutive day to Rs 43,374 per 10 gram in the Mumbai bullion market on a stronger dollar. Retail demand for the yellow metal has been tepid due to high prices pushing dealers to offer discount up to $25-30 per ounce.

The rate of 10 gram 22-carat gold in Mumbai was Rs 39,731 plus 3 percent GST, while 24-carat 10 gram was Rs 43,374 plus GST. The 18-carat gold quoted at Rs 32,531 plus GST in the retail market.

The US dollar index, measured against a basket of six currencies gained for the third straight day to 96.68 on March 12.

"Gold prices after inching up higher saw some profit booking in yesterday's session. There is a panic situation which has forced the market to stay put on any investment and sit on cash which is supporting the dollar on lower levels," said Navneet Damani, Vice President, Motilal Oswal.

Major economies are taking various measures to stabilise the economy. The BOE slashed interest rates by 50 bps as an emergency rate cut just like the Fed did in the recent past. The ECB's policy meet is expected to take place today; there are assumptions that new stimulus measures can be announced pushing the policy closer to its limits.

The broader trend on Comex could be $1,620-1,660 and on the domestic front, prices could hover in the range of Rs 42,900-43,650.

The gold/silver ratio currently stands at 95.66 to 1, which means the amount of silver required to buy one ounce of gold.

Silver prices declined Rs 665 to Rs 45,340 per kg from its closing on March 11.

In the futures market, the gold rate touched an intraday high of Rs 43,637 and an intraday low of Rs 42,907 on MCX. For the April series, the yellow metal touched a low of Rs 37,530 and a high of Rs 44,961.

Gold futures for delivery in April eased Rs 417, or 0.96 percent on the MCX trading at Rs 42,938 per 10 gram in evening trade in a business turnover of 10,656 lots. Gold contracts for June delivery slipped Rs 462, or 1.05 percent, at Rs 43,418 per 10 gram in a business turnover of 14,164 lots.

The value of the April contract traded so far is Rs 5,300.16 crore and June contract saw the value of Rs 860.08 crore.

Similarly, Gold Mini contract for April declined Rs 478, or 1.10 percent at Rs 42,856 in a business turnover of 28,652 lots.

Gold price is trading below falling trend line channel, and the price is expected to trade negative. Sustaining below Rs 43,400 the next leg of correction would drag price lower towards Rs 43,200-43,100, according to Axis Securities.

On the hourly chart, the price is trading below 9, 21 and 60 EMA which is a negative sign with Relative Strength Index (RSI) trading at 45 indicating lower momentum.

The broking firm advised its clients to sell April Gold at Rs 43,400 with stoploss at Rs 43,550 and a target of Rs 43,200.

MCX Gold has strong resistance at Rs 43,635-43,815 whereas support is placed at Rs 43,195-43,030 levels, according to Motilal Oswal.

The brokerage firm said spot gold has resistance at $1,655-1665 whereas support is at $1,622-1,610.

At 12:39 pm (GMT), spot gold slide $20.90 at $1,614.25 an ounce in London trading.

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