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Informist, Wednesday, Aug 21, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold erased early gains and fell on the Multi Commodity Exchange of India and COMEX today because of outflows from exchange-traded funds and profit-taking at higher levels. Market players were also cautious ahead of the minutes of the US Federal Open Market Committee's meeting in July, which will be released later today, for further clarity about Fed's future interest rate stance.

Recovery in the dollar index also weighed on the sentiment. Appreciation of the greenback makes commodities priced in the dollar expensive for holders of other currencies. At 1928 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 101.46.

On Tuesday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 1.73 tn to 857.27 tn, after three days of inflow. The fund has a market value of $69.71 bln.

At 1929 IST, the most-active October contract of GOLD was down 0.1% at 71,700 rupees per 10 gm on the MCX. The same-month contract on COMEX was 0.4% lower at $2,517.3 per ounce.

The highest call open interest for gold was at 70,000-74,000 rupees strikes, suggesting a bullish view, while the highest put open interest was at 70,000-68,000 rupees strikes for the Sep 24 gold contract.

SILVER prices fell on MCX tracking the trend on COMEX and weakness in gold. At 1930 IST, the most-active September contract of silver was down 0.3% at 84,452 rupees per kg on the MCX. The same-month contract on the COMEX was down 0.8% to $29.29 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was down 68 points at 17983 points. As of 1932 IST, the October and December contracts of gold recorded turnovers of 27.12 bln rupees and 2.15 bln rupees, respectively, on the MCX. At the same time, the September and December contracts of silver saw turnovers of 18.48 bln rupees and 6.02 bln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, was higher at 85.28, which indicates that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 84.92 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at 71,400–72,300 rupees per 10 gm

--COMEX gold seen at $2,500–$2,545 an oz

--MCX silver seen at 83,600-85,700 rupees per kg

--COMEX silver seen at $29.00-$29.75 an oz

End

US$1 = 83.92 rupees

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

Edited by Ashish Shirke

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