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Informist, Tuesday, Jul 30, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of GOLD rose today on the Multi Commodity Exchange of India and the COMEX due to rising hope of the US Federal Reserve's interest rate cut in September. The positive sentiment in the yellow metal was also supported by strong demand in the June quarter.

In the June quarter, demand for gold worldwide was at its highest for the period since 2000, supported by healthy over-the-counter transactions, the World Gold Council said in its Gold Demand Trends report today. Global demand for gold rose 4% on year to 1,258.2 tn in Apr-Jun, it said.

"Gold is broadly stuck in a range so far in the session, amid caution ahead of the key event i.e. the policy meeting outcome from Bank of Japan and the US Federal Reserve tomorrow, and the US employment data later in the week," Pranav Mer, vice president research commodity and currency at BlinkX and JM Financial, said in a note.

On the charts, Gold October futures hold support at 68,500-68,350 rupees, while on the upside resistance holds at 69,050-69,280 rupees, Mer said. At 1915 IST, the most active August gold contract on the MCX was up 0.2% at 68,400 rupees per 10 gm. The same-month contract on the COMEX was up 0.5% at $2,389.90 per oz.

On the options front, the highest call open interest for gold is at 69000 strike, which suggests a bullish view, while on the downside, the highest put open interest is at 71,000-strike for the Sep 24 gold contract on the MCX.

However, the upside in bullion was restricted by the strength of the dollar, which makes commodities priced in the greenback expensive for those holding other currencies. The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 104.66.

On Monday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained steady at 843.17 tn. The fund has a market value of $64.8 bln.

SILVER prices rose, taking firm cues from the COMEX, firm trend in gold, and expectation of economic recovery in China. At 1925 IST, the most active September contract for silver on the MCX was up 0.6% at 81,752 rupees per kg. The same-month contract on the COMEX rose 0.9% at $28.52 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 113 points at 17348 points. As of 1925 IST, the August and October contracts of gold recorded turnovers of 11.18 bln rupees and 24.04 bln rupees, respectively, on the MCX. The September and December contracts of silver saw turnovers of 18.81 bln rupees and 1.46 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 85.52, which indicates that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 85.65 on Monday.

Outlook for the rest of the session:

--MCX gold seen at 67,900–68,900 rupees per 10 gm

--COMEX gold seen at $2,375–$2,400 an oz

--MCX silver seen at 80,745-82,155 rupees per kg

--COMEX silver seen at $28.35-$28.70 an oz

End

US$1 = 73.73 rupees

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

Edited by Manisha Baxla

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