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Informist, Wednesday, Jul 31, 2024

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India rose, taking cues from COMEX, as escalating geopolitical tensions in West Asia boosted the metal's safe-haven appeal. Hamas leader Ismail Haniyeh was killed in Iran's capital Tehran today, raising the possibility of widening conflict in the geopolitically volatile region.

The positive sentiment in yellow metal was also aided by a weaker dollar, which makes commodities priced in the greenback cheaper for holders of other currencies. At 1955 IST, the dollar index, which measures the strength in the greenback against a basket of major currencies, was down 0.4% at 104.00 ahead of the US Federal Reserve interest rate decision later today.

"Gold has moved up steadily over the past four trading sessions and is trading close to $2,425 per ounce, supported by bargain buying above support levels of $2,350 amid expectation of rebound in demand in major consumer India after import taxes were cut last week," Pranav Mer, vice president research commodity and currency at BlinkX and JM Financial, said in a note. "The bullion remained supported by rising bets of rate cuts by some global central banks. In major cues to watch would be the US Fed's policy meeting outcome later in the day and the US employment data on Friday," Mer said.

At 1955 IST, the most active August gold contract on the MCX was up 0.7% at 69,050 rupees per 10 gm. The same-month contract on the COMEX was up 0.9% at $2,425.90 per oz. On the options front, the highest call open interest for gold is at 70000 strike, which suggests a bullish view, while on the downside, the highest put open interest is at 69,000-strike for the Sep 24 gold contract on the MCX.

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

SILVER prices rose, taking firm cues from the COMEX, and firm trends in gold and industrial metals. At 1955 IST, the most active September contract for silver on the MCX was up 1.2% at 83,662 rupees per kg. The same-month contract on the COMEX rose 1.2% at $29.30 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 131 points at 17580 points. As of 1955 IST, the August and October contracts of gold recorded turnovers of 1.56 bln rupees and 27.32 bln rupees, respectively, on the MCX. The September and December contracts of silver saw turnovers of 26.07 bln rupees and 3.08 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 84.26, which indicates that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 85.55 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at 67,620–69,600 rupees per 10 gm

--COMEX gold seen at $2,400–$2,450 an oz

--MCX silver seen at 82,064-84,330 rupees per kg

--COMEX silver seen at $29.10-$29.50 an oz

End

US$1 = 83.72 rupees

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

Edited by Akul Nishant Akhoury

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