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Informist, Tuesday, Sep 3, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold were flat on the Multi Commodity Exchange of India, despite mildly firm cues from COMEX, ahead of crucial US economic data this week. The yellow metal traded in a narrow range as traders were cautious of making aggressive bets ahead of the data and preferred to sit on cash.

"Gold prices are stuck in a range over the past 6-7 trading sessions, as market participants look ahead to the US Fed's policy meeting in mid-September with a focus on the quantum of rate cuts, and before that, we have the PMI data and unemployment data this week, which may give some clues on the US Fed's policy path," Pranav Mer, vice president research commodity and currency at BlinkX and JM Financial said in a note.

The US manufacturing purchasing managers' index will be released later today and the August non-farm payrolls data is scheduled for Friday. According to the CME FedWatch tool, the odds of a 50 basis point rate cut by the US Fed in September is 31% and the probability of a 25 bps cut is 69%.

At 1636 IST, the most active October GOLD contract on the MCX was flat at 71,633 rupees per 10 gm. The most active December contract on the COMEX was 0.2% higher at $2,531.6 per oz. The highest call open interest for gold was at the 74,000-75,000-rupee strike, suggesting a bullish view, while the highest put open interest was at the 68,000-rupee strike for the Sep 24 gold contract.

However, the upside was capped by the strength of the dollar. A strong dollar makes commodities priced in the greenback expensive for those holding other currencies. At 1640 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 101.85.

SILVER prices fell on the MCX, taking cues from the COMEX and weak trends in industrial metals. At 1640 IST, the most active December contract for silver on the MCX was down 0.6% at 84,060 rupees per kg. The same-month contract on the COMEX was 0.4% lower at $29.02 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was down 52 points at 17817 points. As of 1645 IST, the October and December gold contracts recorded turnovers of 20.66 bln rupees and 2.86 bln rupees, respectively, on the MCX. The December and March contracts of silver saw turnovers of 13.75 bln rupees and 50.67 mln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 88.21, which indicates that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 87.31 on Monday.

Outlook for the rest of the session:

--MCX gold seen at 70,910–72,463 rupees per 10 gm

--COMEX gold seen at $2,510.00–$2,545.00 an oz

--MCX silver seen at 83,598-86,008 rupees per kg

--COMEX silver seen at $28.80-$29.35 an oz

End

US$1 = 83.97 rupees

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

Edited by Saji George Titus

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