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Informist, Tuesday, Sep 10, 2024

By Sayantan Sarkar

NEW DELHI – Futures contracts of GOLD and SILVER on the Multi Commodity Exchange of India and COMEX rose today as investors awaited the release of inflation data from the US on Wednesday. The data is likely to provide more cues to traders on the quantum of interest rate cut by the US Federal Reserve later this month as it is the central bank's preferred gauge to assess inflation. 

"The (US inflation) data should influence market expectations about the size of the Federal Reserve's rate cut later this month and provide a fresh directional impetus to the non-yielding yellow metal," fxstreet.com said in a report. 

According to the CME FedWatch Tool, the probability of a 25-basis-point Fed rate cut has increased to 71%, while the likelihood of a 50-bps cut stands at 29%. Lower interest rates increase liquidity and lower borrowing costs for the public, which increases demand for investments in commodities such as gold and silver. 

At 1634 IST, the most active October GOLD contract on the MCX was flat at 71,747 rupees per 10 gm, up 0.2% from the previous close. The most active December contract on the COMEX was 0.1% higher at $2,535.5 per ounce.

"Weaker inflation numbers could encourage the Fed to opt for a larger 50-basis-point cut, while stronger data might lead to a smaller 25-basis-point reduction," Kotak Securities said in a report.

The most active December contract of silver on the MCX was up 0.5% at 84,035 rupees per kg. The same-month contract on the COMEX was also 0.5% higher at $28.788 per ounce.  

Outlook for the rest of the session:

--MCX gold seen at 70,808-72,486 rupees per 10 gm

--COMEX gold seen at $2,470.6-2,542.3 an ounce

--MCX silver seen at 81,449-86,193 rupees per kg

--COMEX silver seen at $27.38 $28.89 an ounce

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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