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Informist, Wednesday, Sep 4, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold extended a decline for the fourth straight day on the Multi Commodity Exchange of India, taking cues from COMEX, ahead of crucial US economic data this week. However, the sharp downside in yellow metal was partially offset by a weaker dollar, which makes precious commodities priced in the greenback cheaper for those holding other currencies.

At 1722 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 101.70.

"Gold traded weaker due to profit booking ahead of the expected Non-Farm Payroll data, which is anticipated to be higher than the previous month. This could reduce the likelihood of a 0.50 basis point rate cut in the upcoming US Federal Reserve policy meeting on Sep 18. With a 0.25 basis point cut already priced in, market participants are now awaiting clear signals for a potential 0.50 basis point cut or at least definitive indications of future rate cuts," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in an email note.

At 1721 IST, the most active October GOLD contract on the MCX was down 0.1% at 71,333 rupees per 10 gm. The most active December contract on the COMEX was 0.1% lower at $2,520.2 per oz. The highest call open interest for gold was at the 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.

Investors adopted a cautious stance awaiting key economics numbers from the US, including the August non-farm payrolls data due for release this week, to gauge the potential interest rate cut by Federal Reserve in September, Geojit Financial said in a note.

Today's focus will be on the US job openings and labour turnover survey data and factory orders data.

SILVER prices were steady on the MCX, despite positive cues from the COMEX, due to weakness in gold and industrial metals. At 1725 IST, the most active December contract for silver on the MCX was flat at 83,240 rupees per kg. The same-month contract on the COMEX was 0.2% higher at $28.40 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 45 points at 17799 points. As of 1727 IST, the October and December gold contracts recorded turnovers of 33.31 bln rupees and 3.97 bln rupees, respectively, on the MCX. The December and March contracts of silver saw turnovers of 14.54 bln rupees and 50.64 mln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 88.71, which indicates that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.21 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at 70,950–71,820 rupees per 10 gm

--COMEX gold seen at $2,500.00–$2,550.00 an oz

--MCX silver seen at 82,700-84,400 rupees per kg

--COMEX silver seen at $28.00-$28.88 an oz

End

US$1 = 83.97 rupees

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

Edited by Deepshikha Bhardwaj

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