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Informist, Tuesday, Sep 24, 2024

--COMEX Dec gold contract hits life high of $2,664.6 an oz

By Sandeep Sinha

MUMBAI – Futures contracts of gold on the COMEX touched a fresh lifetime for the third consecutive day as rising tensions in West Asia boosted the metal's safe-haven appeal. Prospects of a less restrictive Federal Reserve monetary policy and a weaker dollar also aided yellow metal prices.

At 2005 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.4% at 100.54. A weak dollar makes commodities priced in the greenback attractive for holders of other currencies, boosting demand for precious metals.

Chicago Fed President Austan Goolsbee suggested that with inflation approaching the central bank's 2% target, the focus should shift towards supporting the labour market, which might necessitate multiple rate reductions over the coming year, Kotak Securities said in a note. The expectation of lower interest rates increases the appeal of non-yielding assets such as gold.

"The gold price continues to rush from record high to (another) record high," Commerzbank said in a note. "Gold benefits from its role as a store of value in times of inflation and uncertainty, and as an interest-free investment in times of falling interest rates," the German bank said.

At 1910 IST, the most-active October GOLD contract on the MCX was up 0.4% at 74,565 rupees per 10 gm. The most active December contract on COMEX was 0.3% higher at $2,659.3 per ounce, after touching a fresh lifetime high of $2,664.6 per oz earlier in the day. 

The highest call open interest for gold was at the 77,000-rupee strike price, suggesting a bullish view, while the highest put open interest was at the 74,000-rupee strike for the Nov 26 gold contract.

On Monday, gold holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained steady at 875.39 tn. The fund has a market value of $74.00 bln.

SILVER prices rose, taking cues from the COMEX, and on the back of firm trends in gold and industrial metals. The positive sentiment in the white metal was also boosted by policy easing measures announced by the People’s Bank of China earlier today to support economic growth. The central bank said it will cut banks' reserve requirement ratio by 50 basis points, and the seven-day reverse repo rate by 20 bps to 1.5%. At 1905 IST, the most active December contract of silver on MCX was up 0.7% at 89,880 rupees per kg. The same-month contract on COMEX was 0.8% higher at $31.33 per oz.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 46 points at 18648 points. As of 1835 IST, the October and December gold contracts recorded turnovers of 45.34 bln rupees and 27.66 bln rupees, respectively, on MCX. The December and March contracts of silver saw turnovers of 28.67 bln rupees and 1.14 bln rupees, respectively.

Outlook for the rest of the session:

--MCX gold seen at 74,200–74,800 rupees per 10 gm

--COMEX gold seen at $2,629.40–$2,671.00 an oz

--MCX silver seen at 89,200-90,500 rupees per kg

--COMEX silver seen at $30.60-$31.95 an oz

End

US$1 = 83.67 rupees

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

Edited by Tanima Banerjee

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