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Informist, Wednesday, Oct. 9, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX rose today because traders covered their short positions after a sharp fall on Tuesday. Investors were cautious ahead of minutes of the US Federal Open Market Committee's September meeting, which will be released later on Wednesday.

The World Gold Council's latest data showed global gold exchange-traded funds saw inflows for the fifth successive month in September, with assets rising by 18.4 tonnes, or $1.41 billion in value. This, too, aided prices.

However, further upside in the bullion metal was prevented by a firm dollar, which makes commodities priced in the greenback expensive for holders of other currencies, dulling the demand for bullion. At 1800 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 102.72.

"Gold may see some recovery later in the day in the wake of the upcoming US CPI inflation data; however, the upside is likely to be capped unless geopolitical tensions flare up further or US yields dip significantly," Praveen Singh, associate vice-president, fundamental currencies and commodities at Sharekhan by BNP Paribas, said in an email note.

At 1800 IST, the most active December GOLD contract on the MCX was up 0.1% at INR 75,200 per 10 gm. The most active December contract on COMEX was 0.1% higher at $2,637.0 per ounce. The highest call open interest for gold was at the INR 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 unchanged at 876.26 tonnes. The fund has a market value of $74.34 billion.

SILVER prices rose, taking cues from COMEX, because of short-covering and the positive trend in gold. At 1820 IST, the most active December contract of silver on the MCX was up 0.5% at INR 89,135 per kg. The same-month contract on COMEX was 0.6% higher at $30.77 per ounce.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up by 48 points at 18635 points. As of 1822 IST, the December and February gold contracts recorded turnovers of INR 19.59 billion and INR 2.46 billion, respectively, on the MCX. The December and March contracts of silver saw turnovers of INR 20.24 billion and INR 1.27 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 85.67, the highest since Sept. 12, indicating that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 84.90 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 74,900–INR 75,500 per 10 gm

--COMEX gold seen at $2,620.0–$2,665.0 an ounce

--MCX silver seen at INR 88,800-INR 90,000 per kg

--COMEX silver seen at $30.15-$31.82 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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