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Informist, Friday, Oct. 4, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India and COMEX Friday as hotter-than-expected US non-farm payrolls data pushed the dollar higher and lowered the bet of another 50-basis-point rate cut by the US Federal Open Market Committee at its November meeting. However, the continuing geopolitical tensions in West Asia, the upcoming US presidential election, and fresh inflows in gold exchange-traded funds restricted the downside.

The US Bureau of Labor Statistics data Friday showed that non-farm payroll employment in September came in at 254,000. Analysts polled by Dow Jones had estimated the payrolls at 150,000 in September, down from the revised figure of 159,000 in August.

The dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.6% at 102.49, the highest level since Aug. 19. A firm dollar makes commodities priced in the greenback expensive for holders of other currencies, dulling the demand for bullion.

According to the CME FedWatch tool, markets are now pricing in a 94.5% chance of the FOMC cutting interest rates by 25 bps at its November meeting. The odds of a 50 bps cut stands at 5.5%, against 53.3% last week.

At 1956 IST, the most active December GOLD contract on the MCX was down 0.1% at INR 76,150 per 10 gm. The most active December contract on COMEX was 0.4% lower at $2,669.5 per ounce. The highest call open interest for gold was at INR 77,000 strike price, suggesting a bullish view, while the highest put open interest was at INR 74,000-INR 73,000 strike for the Nov. 26 gold contract.

Gold holdings of the SPDR Gold Trust, the world's largest gold-backed ETF, rose by 2.59 tonnes to 877.41 tonnes. The fund has a market value of $74.66 billion.

SILVER prices fell marginally, taking cues from COMEX, because of the firm dollar. At 2000 IST, the most active December contract of silver on the MCX was down 0.1% at INR 92,877 per kg. The same-month contract on COMEX was 1.1% lower at $32.11 per ounce.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was down 45 points at 18973 points. As of 2000 IST, the December and February gold contracts recorded turnovers of INR 38.91 billion and INR 2.76 billion, respectively, on the MCX. The December and March contracts of silver saw turnovers of INR 42.25 billion and INR 2.18 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 82.99, indicating that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 83.48 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at INR 75,800–INR 76,800 per 10 gm

--COMEX gold seen at $2,660.0–$2,687.0 an ounce

--MCX silver seen at INR 91,800-INR 93,600 per kg

--COMEX silver seen at $31.80-$32.64 an ounce

End

US$1 = INR 83.97

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

Edited by Rajeev Pai

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