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Informist, Tuesday, Aug 13, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX today because of a weak dollar, which makes commodities priced in the greenback cheaper for holders of other currencies. At 1825 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 103.02.

The positive sentiment was supported by a safe-haven appeal on the possible attack by Iran on Israel and inflows in gold exchange-traded funds. On Monday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 2.88 tn to 849.79 tn. The fund has a market value of $66.93 bln.

At 1830 IST, the most active October GOLD contract on the MCX was up 0.1% at 70,790 rupees per 10 gm. The same-month contract on COMEX was 0.2% higher at $2,484.6 per ounce. 

On the options side, the highest call open interest for gold was at 70000-74,000 strike, while on the downside, the highest put open interest was at 68000-67000 strike for MCX Sep 24 gold contract.

"The geopolitical tensions in the Middle East (West Asia) and speculation about upcoming interest rate cuts by the US Federal Reserve are providing a tailwind, even though these have recently been scaled back somewhat," said Carsten Fritsch, commodity analyst at Commerzbank, in a report.

Market participants are awaiting the US consumer price index data, due on Wednesday, for further cues on the US Federal Reserve’s interest rate trajectory.

SILVER prices fell, taking negative cues from the COMEX, and weakness in industrial metals. At 1832 IST, the most active September contract for silver on the MCX was down 0.6% at 81,125 rupees per kg. The same-month contract on the COMEX was down 0.8% to $27.76 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was down just 5 points at 17635 points. As of 1838 IST, the October and December contracts of gold recorded turnovers of 20.73 bln rupees and 1.49 bln rupees, respectively, on the MCX. At the same time, the September and December contracts of silver saw turnovers of 22.38 bln rupees and 5.05 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, was higher at 89.19, which indicates that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 87.82 on Monday.

Outlook for the rest of the session:

--MCX gold seen at 70,300–71,200 rupees per 10 gm

--COMEX gold seen at $2,465–$2,500 an oz

--MCX silver seen at 80600-82,300 rupees per kg

--COMEX silver seen at $27.50-$28.00 an oz

End

US$1 = 83.97 rupees

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

Edited by Manisha Baxla

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