Gold slips after opening at all-time high

The white precious metal closed at the highest level since August 23.

After opening at an all time high at Rs 28,050 per 10 grams, gold fell sharply in Mumbai’s popular Zaveri Bazar on Saturday due to lack of physical demand. Towards the end of the day, the yellow metal was trading with a discount of Rs 100 over it’s landed cost in India.

Still, gold gained Rs 205 to close in the physical market at Rs 27,815 per 10 gram following the global trend where investors sought refuge in safe haven assets after the US employment growth data showed a grinding halt in August. The metal has not seen this level in the last 15-day. The metal had closed yesterday at Rs 27,610 per 10 grams. The metal, however, is still Rs 160 away from the highest closing record of Rs 27,975 it had set on August 20.

Silver closed at the highest level since August 23 gaining Rs 545 to close at Rs 65,215 per kg on Saturday. The white precious metal was trading at Rs 64,670 per kg on Friday.

“There has been no physical demand as all traders, stockists and buyers remained almost absent from the physical activities due to the ongoing Ganapati festival. The week ended virtually without any physical activity due to central and regional holidays on most of days in Mumbai,” said Bhargav Vaidya, an analyst with B N Vaidya & Associates, a city-based bullion dealer.

Gold climbed to a one-and-a-half week high, benefiting from a weak US jobs report for August which underscored the frail state of the world’s largest economy and increased safe-haven bids for the precious metal.

Gold futures for delivery in October on the Multi Commodity Exchange (MCX) found good support at Rs 26,626 per 10 grams level and closed sharply higher.

“For the next week we expect gold prices to find initial support at Rs 27,470 - 27,370 per 10 grams level and further below strong support is observed at Rs 26,850-26,800. Weekly closing below Rs 26,800 would confirm that the current rally has come to an end and thereby correction can be expected initially towards Rs 25,950 level and then finally towards Rs 25,250 level,” said a report from the broking firm Angel Broking.

Resistance was observed at Rs 28,500-28,600 and strong resistance was seen at the Rs 29,000-29,100 level. Trading consistently above the Rs 29,100 mark would renew the rally initially towards Rs 29,700 and then finally towards the Rs 31,035 mark, the report added.

Lalit Jagawat, proprietor of Nakoda Bullion, said the ongoing volatility has drained money from the market as traders rushed to cover the margin deficit in the futures market.

Gold futures on the COMEX added to gains on Friday. The metal for delivery in December rallied $52.90 to $1,882 an ounce, a gain of 2.89 per cent increase on Friday.