India Bullion
Gold prices up on weaker dollar, Powell's speech eyed
This story was originally published at 19:14 IST on 15 July 2024
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By Sandeep Sinha
MUMBAI – Futures contracts of gold rose today on the Multi Commodity Exchange of India and COMEX as the dollar slipped ahead of US Federal Reserve Chair Jerome Powell’s speech later in the day. The positive sentiment was aided by increasing bets on the US central bank cutting interest rates in September.
At 1735 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 104.14. A weaker greenback makes precious commodities priced in the greenback cheaper for holders of other currencies.
At 1735 IST, the most-active August GOLD contract on the MCX was up 0.2% at 73,414 rupees per 10 gm. The same-month contract on COMEX was marginally higher by 0.1% at $2,423.30 per oz.
On the options front, the highest call open interest for gold is at 75,000 strike, which suggests a bullish view. On the downside, the highest put open interest is at 72,000-71,000 strike for the Jul 25 gold contract on the MCX.
Market participants this week will also keep an eye out for important data points like US retail sales, industrial production, and a few housing numbers which could provide clarity on overall economic health and the Fed's interest path ahead, Motilal Oswal Financial Services said in a note.
On Friday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were steady at 835.09 tn. The fund has a market value of $64.59 bln.
SILVER prices fell, taking firm cues from COMEX and a weak trend in industrial metals. At 1740 IST, the most-active September contract for silver on the MCX was down 0.3% at 92,875 rupees per kg. The same-month contract on COMEX fell 0.5% at $31.02 per oz.
On the options front, the highest call open interest for silver is at 95,000-100,000 strike, which suggests a bullish view. On the downside, the highest put open interest is at 90,000-85,000 strike for the Aug 27 silver contract on the MCX.
The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up just 20 points at 18880 points. As of 1745 IST, the August and October contracts of gold recorded turnovers of 15.30 bln rupees and 3.64 bln rupees, respectively, on the MCX. At the same time, the September and December contracts of silver saw turnovers of 16.51 bln rupees and 612.37 mln rupees, respectively.
The spot gold-silver ratio, also known as the Mint ratio, was higher at 78.45, which indicates that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 78.30 on Friday.
Outlook for the rest of the session:
--MCX gold seen at 72,975–73,935 rupees per 10 gm
--COMEX gold seen at $2,410–$2,440 an oz
--MCX silver seen at 92,100-93,600 rupees per kg
--COMEX silver seen at $30.90-$31.20 an oz
End
US$1 = 83.59 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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