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Informist, Wednesday, Aug 7, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of GOLD rose on the Multi Commodity Exchange of India and COMEX today because of short-covering. The positive cue in yellow metal was also boosted by expectation of the US Federal Reserve interest rate cut in its September meeting and fresh inflows into gold exchange-traded funds.

On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 2.59 tn to 848.06 tn. The fund has a market value of $65.32 bln.

However, the upside was capped by strength in the dollar. A strong dollar makes commodities priced in the greenback expensive for those holding other currencies. At 1835 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 101.59.

At 1835 IST, the most active October gold contract on the MCX was up 0.4% at 69,225 rupees per 10 gm. The same month contract on the COMEX was 0.5% higher at $2,421.20 per oz. The highest call open interest for gold was at 70,000-74,000 strike, suggesting a bullish view, while the highest put open interest was at 70,000-68,000-strike for the Sep 24 contract.

"Gold prices remained volatile, with some support due to the depreciation of the Yen against the dollar, moving from 144.50 to 147.50. Gold participants will be closely watching the weekly jobless claims data set to be released Thursday, for a data-specific approach," said Jateen Trivedi, vice-president and research analyst at LKP Securities, in an email note.

SILVER prices fell, taking cues from COMEX, and also due to concern about demand. At 1845 IST, the most active September contract for silver on the MCX was down 0.3% at 79,375 rupees per kg. The same-month contract on the COMEX was 0.4% lower at $27.09 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was flat at 17289 points. As of 1850 IST, the October and December contracts of gold recorded turnovers of 21.97 bln rupees and 1.56 bln rupees, respectively, on the MCX. The September and December contracts of silver saw turnovers of 24.19 bln rupees and 3.09 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 88.66, which indicates that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 89.50 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at 68,500–69,500 rupees per 10 gm

--COMEX gold seen at $2,400–$2,440 an oz

--MCX silver seen at 78,250-80,600 rupees per kg

--COMEX silver seen at $26.95-$27.20 an oz

End

US$1 = 83.96 rupees

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

Edited by Akul Nishant Akhoury

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