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Informist, Friday, Jul 19, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold were down on the Multi Commodity Exchange of India and COMEX today due to profit-taking by traders. Sentiment for the precious metal was also weighed down by outflows from exchange-traded funds and strength in the dollar, which makes commodities priced in the greenback expensive for holders of other currencies.

The yellow metal came under intense selling pressure as market participants viewed the recent rally as overdone. Weak retail demand in top consumers China and India and slowing central bank purchased also hurt gold prices.

Most of the retail players got trapped at higher levels and were forced to unwind their long positions in gold as stop losses were triggered, which also pushed prices lower.

The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 145.34. On Thursday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 2.01 tn to 840.01 tn. The fund has a market value of $66.53 bln.

At 1910 IST, the most-active August GOLD contract on the MCX was down 1.5% at 73,029 rupees per 10 gm. The same-month contract on COMEX was lower by 2.3% at $2,401.20 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 71,000-70,000 strike for the Jul 25 gold contract on the MCX.

SILVER prices tumbled, taking weak cues from COMEX and negative sentiment for gold and industrial metals. At 1910 IST, the most-active September contract for silver on the MCX was down 2.4% at 89,649 rupees per kg. The same-month contract on COMEX fell 3.2% to $29.27 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 down 329 points at 18627 points. As of 1910 IST, the August and October contracts of gold recorded turnovers of 51.54 bln rupees and 14.07 bln rupees, respectively, on the MCX. At the same time, the September and December contracts of silver saw turnovers of 45.50 bln rupees and 4.67 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, was higher at 82.90, which indicates that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 81.10 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at 72,750–73,850 rupees per 10 gm

--COMEX gold seen at $2,380–$2,420 an oz

--MCX silver seen at 87,800-91,300 rupees per kg

--COMEX silver seen at $28.90-$29.60 an oz

End

US$1 = 83.66 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Ashish Shirke

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