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Informist, Thursday, Sep 12, 2024

By Sayantan Sarkar

NEW DELHI – Futures contracts of gold and silver on the Multi Commodity Exchange of India and COMEX rose today as the European Central Bank cut interest rates by 25 basis points to 3.50%. Lower interest rates typically favour non-yielding commodities such as gold and silver. Gold prices on COMEX hit record highs after the ECB announced a cut in interest rates.  

Investors are now waiting for the US Federal Reserve's monetary policy meeting next week, when the central bank is expected to cut interest rates. According to the CME FedWatch Tool, the markets are currently pricing in an 85% chance of a 25-basis-point rate cut at the next Federal Open Market Committee policy meeting on Sep 17-18. 

Meanwhile, jobless claims in the US rose to 230,000 in the week ended Sep 6, higher than 228,000 the previous week. While the reading was in line with market expectations, the data gives more impetus to the US Fed to cut interest rates next week. 

Global prices of gold and silver also rose as the dollar fell against a basket of major currencies. A weaker dollar makes commodities priced in the greenback cheaper for overseas buyers. 

At 1908 IST, the most-active October GOLD contract on the MCX was at 72,635 rupees per 10 gm, up 1% from the previous close. The most-active December contract on the COMEX was 1.2% higher at $2,573 per ounce, its highest ever level.

The most-active December contract of SILVER on the MCX was at 86,235 rupees per kg, up 2.1% from the previous close. The same-month contract on the COMEX was 2.5% higher at $29.630 per ounce.

Outlook for the rest of the session:

--MCX gold seen at 71,600-72,800 rupees per 10 gm

--COMEX gold seen at $2,487.4-$2,580.5 an ounce

--MCX silver seen at 83,786-87,924 rupees per kg

--COMEX silver seen at $28.30-$29.81 an ounce

End

US$1 = 83.97 rupees

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

Edited by Avishek Dutta

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