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Informist, Tuesday, Oct. 8, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold were flat on the Multi Commodity Exchange of India, despite mildly positive cues from COMEX, ahead of minutes of the US Federal Open Market Committee's September meeting on Wednesday. The yellow metal traded in a narrow range as traders awaited fresh triggers for direction. 

Weakness in the US dollar was offset by the People's Bank of China pausing gold purchases for the fifth straight month. At 1800 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 102.43.

"Gold is currently being pulled in different directions by opposing factors. The US inflation data to be released on Thursday is likely to show a further decline in price pressure, but is unlikely to trigger renewed speculation of stronger Fed rate cuts. Therefore, higher gold prices are likely to be primarily driven by geopolitical risks," Commerzbank said in a research note.

At 1800 IST, the most active December GOLD contract on the MCX was flat at INR 76,075 per 10 grammes. The most active December contract on COMEX was 0.1% higher at $2,668.5 per ounce. The highest call open interest for gold was at the INR 76,000-77,000 strike price, suggesting a bullish view, while the highest put open interest was at the INR 73,000 strike for the Nov. 26 gold contract.

Gold holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained steady at 876.26 tonnes. The fund has a market value of $74.37 billion.

The fact that gold prices have not corrected more sharply is probably due to the conflict between Israel and Iran. "The uncertainty about this is fuelling demand for gold as a safe haven," the German bank said.

SILVER prices fell, taking cues from COMEX, and a sharp sell-off in industrial metals. At 1800 IST, the most active December contract of silver on the MCX was down 2% at INR 90,505 per kg. The same-month contract on COMEX was 2.2% lower at $31.30 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 1 point at 18920 points. As of 1805 IST, the December and February gold contracts recorded turnovers of INR 30.78 billion and INR 1.89 billion, respectively, on the MCX. The December and March contracts of silver saw turnovers of INR 34.28 billion and INR 2.44 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 84.82, indicating that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 83.92 on Monday.

Outlook for the rest of the session:

--MCX gold seen at INR 75,650–INR 76,200 per 10 gm

--COMEX gold seen at $2,653.0–$2,675.0 an ounce

--MCX silver seen at INR 89,700-INR 91,500 per kg

--COMEX silver seen at $31.10-$32.47 an ounce

End

US$1 = INR 83.96

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

Edited by Avishek Dutta

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