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Informist, Friday, Sep 6, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of GOLD rose on the Multi Commodity Exchange of India and on the COMEX because of weakness in the dollar ahead of the US non-farm payrolls data, due later today. Analysts polled by Dow Jones had estimated the payrolls to come in at 161,000 in August from 114,000 in July.

The yellow metal is a whisker away from a fresh all-time high in the international market in anticipation of weak job numbers which may push the Federal Reserve to go for a 50 basis points cut. "Gold continues to cautiously trade around $2,500 an oz, and in doing so, is trying to break the cycle of negative September returns, a seasonal trend which has seen gold trade lower in all but one of the last ten Septembers," Ole Hansen, head of commodity strategy at Saxo Bank, said in a research note.

The positive sentiment in the bullion metal was also supported by continued inflows in gold exchange traded funds. The latest World Gold Council data showed that the global gold exchange traded funds saw inflows for the fourth successive month in August, with assets rising by 28.5 tn, or $2.08 bln in value.

The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 105.63. A weak dollar makes commodities priced in the greenback attractive for holders of other currencies, boosting demand for precious metals.

At 1535 IST, the most active October GOLD contract on the MCX was up 0.1% at 71,995 rupees per 10 gm. The most active December contract on the COMEX was 0.2% higher at $2,548.7 per oz. The highest call open interest for gold was at the 74,000-75,000 rupee strike price, suggesting a bullish view, while the highest put open interest was at the 71,000-rupee strike for the Sep 24 gold contract.

Investors also await speeches by Federal Open Market Committee members John Williams and Christopher Waller for cues on the quantum of interest rate cut by the Federal Reserve in September.

SILVER prices marginally rose, taking positive cues from the COMEX, and a mildly firm trend in gold. At 1535 IST, the most active December contract of silver on the MCX was up 0.1% at 85,016 rupees per kg. The same-month contract on the COMEX was 0.2% lower at $29.15 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up just 12 points at 17953 points. As of 1537 IST, the October and December gold contracts recorded turnovers of 11.03 bln rupees and 1.42 bln rupees, respectively, on the MCX. The December and March contracts of silver saw turnovers of 8.14 bln rupees and 31.28 mln rupees, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 87.36, indicating that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.64 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at 71,100–72,500 rupees per 10 gm

--COMEX gold seen at $2,530.00–$2,560.00 an oz

--MCX silver seen at 83,700-87,200 rupees per kg

--COMEX silver seen at $28.80-$29.65 an oz

End

US$1 = 83.95 rupees

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

Edited by Deepshikha Bhardwaj

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