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Informist, Wednesday, Aug 14, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold erased earlier gains and fell on the Multi Commodity Exchange of India and COMEX today because of outflow in exchange-traded funds and weak safe-haven appeal. Profit-booking at higher levels also weighed on the sentiment.

On Tuesday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 4.03 tn to 845.76 tn. The fund has a market value of $67.18 bln.

"Contained geopolitical tensions and weak China demand are bearish for the yellow metal. However, presently, markets are focusing mainly on the US economy and its monetary policy," said Praveen Singh, associate vice president, fundamental currencies and commodities at Sharekhan by BNP Paribas, in an email note.

At 1935 IST, the most active October GOLD contract on the MCX was down 0.4% at 70,436 rupees per 10 gm. The same-month contract on COMEX was 0.5% lower at $2,494.9 per ounce. 

On the options side, the highest call open interest for gold was at 70,000 rupees and 74,000 rupees strike, while on the downside, the highest put open interest was at 69,000 rupees and 68,000 rupees strike for MCX Sep 24 gold contract.

However, the downside in bullion was cushioned by weakness in the dollar, which makes precious metals priced in dollars cheaper for those holding other currencies. At 1940 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was down 0.2% at 102.39.

SILVER prices fell on the MCX, tracking the COMEX and weakness in gold. At 1940 IST, the most active September contract for silver on the MCX was down 0.2% at 80,883 rupees per kg. The same-month contract on the COMEX was down 0.5% to $27.66 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was down just 31 points at 17580 points. As of 1940 IST, the October and December contracts of gold recorded turnovers of 37.03 bln rupees and 2.32 bln rupees, respectively, on the MCX. At the same time, the September and December contracts of silver saw turnovers of 36.09 bln rupees and 7.37 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, was lower at 88.80, which indicates that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 89.24 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at 70,200–71,000 rupees per 10 gm

--COMEX gold seen at $2,480–$2,510 an oz

--MCX silver seen at 80,100-82,000 rupees per kg

--COMEX silver seen at $27.50-$27.80 an oz

End

US$1 = 83.95 rupees

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

Edited by Akul Nishant Akhoury

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