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Informist, Friday, Aug 9, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of GOLD were flat on the Multi Commodity Exchange of India, taking cues from COMEX, after a sharp rally on Thursday. Sentiment for the yellow metal was lifted after US unemployment claims data, which eased concerns about a hard landing in the world's largest economy.

"Gold prices recovered on Thursday to above $2,425/oz amid stabilisation in the broader financial market and cooling recession fears. The expectations of a US rate cut in September (with the market split between 25 basis points and 50 basis points cuts) continued to support gold fundamentally," ING Economics said in a note.

At 1925 IST, the most active October gold contract on the MCX was flat at 69,740 rupees per 10 gm. The same-month contract on the COMEX was steady at $2,441.30 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.

The downside in bullion metal was restricted by a weaker dollar and inflows in gold exchange-traded funds. The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 103.16. A weaker greenback makes dollar-denominated precious metals attractive to foreign buyers.

On Thursday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 2.87 tn to 846.91 tn. The fund has a market value of $65.63 bln.

"Upside in gold may be limited in the near term due to recovering risk appetite as recent data show some improvements and weak Chinese demand as Shanghai gold prices are at a discount of around $20," Praveen Singh, associate vice-president, fundamental currencies and commodities at Sharekhan by BNP Paribas said in an email note.

SILVER prices fell, taking cues from COMEX, because of profit-taking. At 1932 IST, the most active September contract for silver on the MCX was down 0.2% at 80,450 rupees per kg. The same-month contract on the COMEX was 0.4% lower at $27.49 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was down just 17 points at 17403 points. As of 1933 IST, the October and December contracts of gold recorded turnovers of 23.87 bln rupees and 2.62 bln rupees, respectively, on the MCX. The September and December contracts of silver saw turnovers of 25.52 bln rupees and 4.04 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 88.51, which indicates that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.75 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at 68,450–70,300 rupees per 10 gm

--COMEX gold seen at $2,430–$2,460 an oz

--MCX silver seen at 79,400-82,000 rupees per kg

--COMEX silver seen at $27.20-$27.70 an oz

End

US$1 = 83.96 rupees

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

Edited by Aditya Sakorkar

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