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Informist, Thursday, Aug 8, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India rose, taking cues from COMEX, as increasing geopolitical tension in West Asia boosted the metal’s safe-haven appeal. The positive sentiment in precious metals was also aided by rising odds of the US Federal Reserve cutting interest rates in September.

At 1855 IST, the most active October gold contract on the MCX was up 0.5% at 69,299 rupees per 10 gm. The same-month contract on the COMEX was 0.5% higher at $2,422.30 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 68,000-65,000-strike for the Sep 24 contract.

However, the further upside in the bullion metal was capped by a rebound in the dollar, an outflow in gold exchange-traded funds and the People’s Bank of China pausing gold buying for the third straight month. China is the largest consumer and importer of gold.

The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 103.38 because of stronger-than-expected US jobs data. The US Labour Department data released today showed that the number of people claiming jobless benefits fell by 17,000 to 233,000 in the week ended Aug 3 against an expectation of 240,000 polled by Dow Jones.

On Wednesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 4.02 tn to 844.04 tn. The fund has a market value of $65.11 bln.

SILVER prices rose, taking cues from COMEX, and positive trends in gold and base metals. At 1910 IST, the most active September contract for silver on the MCX was up 0.8% at 79,550 rupees per kg. The same-month contract on the COMEX was 1% higher at $27.21 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 64 points at 17282 points. As of 1855 IST, the October and December contracts of gold recorded turnovers of 23.62 bln rupees and 1.85 bln rupees, respectively, on the MCX. The September and December contracts of silver saw turnovers of 22.42 bln rupees and 4.51 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 88.99, which indicates that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.77 on Wednesday.

Outlook for the rest of the session:

--MCX gold seen at 68,700–69,550 rupees per 10 gm

--COMEX gold seen at $2,410–$2,445 an oz

--MCX silver seen at 78,300-80,400 rupees per kg

--COMEX silver seen at $26.8-$27.55 an oz

End

US$1 = 83.96 rupees

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

Edited by Saji George Titus

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