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Informist, Monday, Oct. 7, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX today because of a weak dollar. The possible retaliatory response from Israel to Iran as the latter launched ballistic missiles last week also lifted safe-haven demand for yellow metal.

Hamas launched rockets at Tel Aviv on the one-year anniversary of the Oct. 7 attacks, and Israelis held memorials to mourn the victims of the deadly assault, Al Jazeera reported. There was a large explosions in southern Beirut as Israeli forces continued to pound the Lebanese capital, while at least 10 people were wounded in the Israeli city of Haifa following a Hezbollah rocket attack, it said.

At 1740 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 102.43. A weaker dollar makes commodities priced in the greenback cheaper for holders of other currencies, boosting the demand for bullion.

"Gold prices saw a positive surge after initial weakness, driven by escalating geopolitical tensions between Iran and Israel," said Jateen Trivedi, vice president - research analyst - Commodity and Currency, LKP Securities. "India's upcoming RBI policy on Wednesday is also expected to influence the rupee, potentially affecting gold prices further," he said.

At 1740 IST, the most active December GOLD contract on the MCX was up 0.2% at INR 76,311 per 10 gram. The most active December contract on COMEX was 0.4% higher at $2,678.4 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 74,000-73,000 strike for the Nov. 26 gold contract.

Gold holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 1.15 tonne to 876.26 tonne. The fund has a market value of $74.63 billion.

SILVER prices fell marginally, taking cues from COMEX. At 1745 IST, the most active December contract of silver on the MCX was down 0.6% at INR 92,765 per kilogram. The same-month contract on COMEX was 0.7% lower at $32.16 per ounce.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up by just 18 points at 19016 points. As of 1745 IST, the December and February gold contracts recorded turnovers of INR 21.08 billion and INR 1.99 billion, respectively, on the MCX. The December and March contracts of silver saw turnovers of INR 18.04 billion and INR 1.15 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 83.24, indicating that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 82.40 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 75,800–INR 76,650 per 10 gm

--COMEX gold seen at $2,653.0–$2,692.0 an ounce

--MCX silver seen at INR 92,000-INR 93,300 per kg

--COMEX silver seen at $31.73-$33.20 an ounce

End

US$1 = INR 83.98

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

Edited by Akul Nishant Akhoury

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