Gold Prices In India Remain Steady, Despite Drop In Global Prices

Gold price in India started the week on a steady note as gold rates remained stable despite gains in yields after U.S. payroll trended higher.

The gold rate for 22k in India today traded at Rs 55,300 for 10 grams of 22 karats and Rs 60,330 for 10 grams of 24 karats.

The metal is witnessing a declining trend in India over the last couple of days, as it took cues from the international markets. India imports gold and when gold prices move higher in the global market, they rally in India as well.

In the overseas forum, spot gold stood at $1,943 an ounce and U.S. gold futures at $1,962.30 per ounce.

The precious metal slid in the global markets on Friday as higher-than-expected jobs data from the United States of America has kept alive the hopes that the Fed would pause its interest rate hike stance. The situation will put the bullion on course for recording its first weekly gain.

For May, the U.S. nonfarm payroll data marched up to touch 339,000, as it beat expectations for an increase of 190,000. Yet the unemployment rate grew to 3.7 per cent from a 53-year low of 3.4 per cent in April 2023.

Meanwhile, Praveen Singh - Associate VP, Fundamental currencies and Commodities, Sharekhan by BNP Paribas opinioned the same and said that the Gold - Bears eye a retest of $1930 support.

Spot gold is currently down by a dollar after closing sharply lower Friday. The metal tumbled 1.53% on the last trading day of the week to close at $1948.46. The selloff came on a much better-than-expected number of jobs added by US employers in May. Although US nonfarm payroll report released Friday was mixed, US employers added 339k jobs as against the forecast of 195k while the two-month payroll net revision added 93k jobs. On the negative side, the unemployment rate rose to 3.70% from 3.40% in April; average hourly earnings y-o-y rose by 4.30% vs the estimate of 4.40%; average weekly hours for all employees slipped to 34.30 from 34.40 in April.

Robust headline figures led to higher bond yields and the Dollar Index, which weighed heavily gold. The Two-year US yields surged 3.88% to 4.511%, while the Dollar Index rallied 0.46%. Today, the 2-year yields are up over 1% from Friday's closing as the Greenback is trading in green.

Investors will focus on the US ISM non-manufacturing PMI data for May to be released today. The data is likely to show that the services sector expanded for the fifth straight month.

The yellow metal is expected to test support at $1930 in case of decent ISM non-manufacturing data. Resistance is at $1965/$1990.