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Informist, Thursday, Sep 5, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India rose today, tracking firm cues on the COMEX ahead of data on US jobless claims later today. The sentiment was aided by short-covering and a weaker dollar, which makes commodities priced in the greenback cheaper for holders of other currencies.

Expectations of an aggressive interest rate cut by the US Federal Reserve after the release of weaker-than-expected US job openings and labour turnover survey data, the lowest in three and a half years, supported safe-haven demand for gold.

At 1645 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 101.15.

"We believe gold's upward momentum will continue, supported by a weaker dollar and the long-awaited US Fed rate cut. The US presidential election in November will also continue to add to gold's upward momentum through to the end of the year," ING Economics said in a note.

At 1700 IST, the most active October GOLD contract on the MCX was up 0.7% at 71,936 rupees per 10 gm. The most active December contract on the COMEX was 0.8% lower at $2,546.4 per oz. The highest call open interest for gold was at the 75,000-rupee strike price, suggesting a bullish view, while the highest put open interest was at the 68,000-rupee strike for the Sep 24 gold contract.

Market participants will also take cues from the US Institute for Supply Management's services purchasing managers' index, Automatic Data Processing non-farm employment change data later today, and August non-farm payrolls data on Friday.

SILVER prices rose, taking positive cues from the COMEX, and tracking a firm trend in gold. At 1705 IST, the most active December contract of silver on the MCX was up 1.5% at 84,805 rupees per kg. The same-month contract on the COMEX was 1.8% higher at $29.07 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 123 points at 17925 points. As of 1705 IST, the October and December gold contracts recorded turnovers of 25.88 bln rupees and 3.26 bln rupees, respectively, on the MCX. The December and March contracts of silver saw turnovers of 16.97 bln rupees and 43.46 mln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 87.64, indicating that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.72 on Wednesday.

Outlook for the rest of the session:

--MCX gold seen at 71,054–72,800 rupees per 10 gm

--COMEX gold seen at $2,510.00–$2,566.00 an oz

--MCX silver seen at 83,715-85,200 rupees per kg

--COMEX silver seen at $28.70-$29.46 an oz

End

US$1 = 83.98 rupees

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

Edited by Avishek Dutta

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