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Informist, Friday, Sep 20, 2024

By J. Navya Sruthi

MUMBAI – Futures contracts of gold rose today on the Multi Commodity Exchange of India, tracking those on the COMEX as investors expect the US Federal Reserve to cut key interest rates further before the end of December, analysts said. "Geopolitical risks and concerns over the US and China's economic outlook also provide tailwinds for the safe-haven asset," Kedia Advisory said in a note. 

At 2050 IST, the most-active October GOLD contract on the MCX was up 0.7% at 74,611 rupees per 10 gm. The most-active December contract on the COMEX was 1% higher at $2,641 per ounce.  

"Even though Fed Chairman Powell tried to emphasise at the press conference that such a rate cut should be the exception rather than the rule, the market is apparently not convinced," Carsten Fritsch, analyst at Commerzbank Research, said in a note. The research firm expects interest rate cuts of only 25 basis points each at the remaining two Federal Open Market Committee meetings, "which is why the rally in gold should not go on forever," the analyst said.

The US Federal Open Market Committee cut the Federal funds target range by 50 basis points to 4.75-5.00% at its two-day September meeting ending Wednesday. According to the summary of economic projections, released late Wednesday, nine out of 19 Federal Open Market Committee officials expect a further 50-bps rate cut to 4.25-4.50% by the end of the year, and seven expect a 25-bps cut in the policy rate. Two officials expect the Federal funds rate to remain unchanged from current levels until the end of 2024. Meanwhile, only one official expects a further 75-bps rate cut by the year-end.

SILVER prices fell on the MCX, tracking similar movements on the COMEX and losses in base metals on the London Metal Exchange. At 2050 IST, the most-active December contract of silver was down 0.2% at 89,776 rupees per kg. The same-month contract on the COMEX was steady at $31.44 per oz.

Outlook for the rest of the session:

--MCX gold seen at 72,940–75,410 rupees per 10 gm

--COMEX gold seen at $2,561.1.00–$2,632.71 an oz

--MCX silver seen at 88,500-90,600 rupees per kg

--COMEX silver seen at $30.90-$31.50 an oz

End

US$1 = 83.56 rupees

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

Edited by Manisha Baxla

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