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Informist, Monday, Aug 19, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India and COMEX today because traders resorted to profit taking at higher levels. The yellow metal earlier today hit a fresh all-time high of $2526.1 an oz on expectation of a US Federal Reserve interest rate cut in September and rising tensions in West Asia.

However, the downside was cushioned by fresh inflows in gold exchange-traded funds and a weaker dollar, which makes commodities priced in the greenback cheaper for holders of other currencies, boosting demand for precious metals. At 1915 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.2% at 102.23.

On Friday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 7.19 tn to 854.97 tn, the highest since Jan 26. The fund has a market value of $68.32 bln.

At 1918 IST, the most active October gold contract on the MCX was down 0.2% at 71,270 rupees per 10 gm. The October contract on the COMEX was down 0.4% at $2,504.70 per oz. The highest call open interest for gold was at 73,000-74,000 rupees strikes, suggesting a bullish view, while the highest put open interest is at 69,000-68,000 rupees strikes for the Sep 24 gold contract.

SILVER prices rose, taking firm cues from the COMEX, and a positive trend in industrial metals. At 1925 IST, the most active September contract for silver on the MCX was up 0.9% at 83,905 rupees per kg. The same-month contract on the COMEX was 0.9% higher at $29.13 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 17860 points. As of 1925 IST, the October and December contracts of gold recorded turnovers of 32.42 bln rupees and 4.23 bln rupees, respectively, on the MCX. The September and December contracts of silver saw turnovers of 20.21 bln rupees and 5.46 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 85.61, which indicates that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 86.43 on Friday.

Outlook for the rest of the session:

--MCX gold seen at 70,800–71,700 rupees per 10 gm

--COMEX gold seen at $2,490–$2,430 an oz

--MCX silver seen at 82,700-84,800 rupees per kg

--COMEX silver seen at $28.90-$29.25 an oz

End

US$1 = 83.87 rupees

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

Edited by Deepshikha Bhardwaj

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